Lessons to be learned from the pandemic

Almost a year after the start of the health crisis linked to the pandemic and its numerous impacts, what lessons can we learn from it in the construction sector?

Few people can claim to have seen the health crisis linked to the pandemic coming. Under these circumstances, it hit the construction industry hard and, in several cases, caused irreparable economic damage to some contractors who were less well equipped to deal with it. The expression “prevention is better than cure” has therefore once again proved to be correct. However, what lessons can we draw from the health crisis? What do we need to remember in order to be better prepared for the future?

The short answer: improve your contracts

This answer, which is far from solving all ills, may not be the most attractive, but it remains the most effective for an entrepreneur. The aim here is not to prevent unpredictable and uncertain events, but simply to find a contractual way to reduce the risks that result from them.

For example, over the past few months, numerous legal columns have dealt with the pandemic and the resulting health crisis by addressing the concept of force majeure. Is it a force majeure within the meaning of the contract, which gives rise to certain exemptions? In order to avoid any ambiguity on this issue, why not simply modify the list of elements assimilated to force majeure generally provided as an example in the contract by adding the terms “health crisis” and “pandemic”?

Otherwise, particular attention must be paid to what the contracts provide in terms of the impact of such a situation in terms of execution times, but also on the cost of materials. To this end, experience suggests that if a similar situation occurs again, the turnaround times will be extended and that a scarcity effect on certain materials will increase their price.

In such a context, it is expected that specialized contractors and suppliers will make several claims arising from extensions of deadlines or increases in costs. For his part, the general contractor must avoid being exposed to such claims by integrating certain clauses that will prevent them in his contracts that link him to subcontractors or, he must ensure that he himself is in a position to be able to formulate such claims to the contracting authority by integrating appropriate contractual clauses into his contract for this purpose. The idea is obviously to be able to avoid the bill or to pass it on to the next one.

In short, while not allowing you to avoid the next pandemic, a well-made contract will at the very least allow you to reduce the effects on your business. When we know that the contract is the law between the parties, industry stakeholders have every interest in modifying their contract in order to minimize the impacts of a situation that they cannot prevent.

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