Force Majeure, Construction Delays, Labor Shortages and COVID-19

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Eventually, supply and labor shortages due to governmental restrictions or quarantines will affect the critical path of construction projects.

April 6, 2020
Elizabeth J. Dye - Gravel2Gavel Construction & Real Estate Law Blog

The global effect of the Coronavirus disease (COVID-19) is still unknown, and the progress of many large-scale construction projects has been affected by “Shelter in Place” orders, although some states and localities have classified construction projects as “essential.” Just last Friday, New York shut down all construction, with few exceptions.

Several states have enacted gathering bans of all sizes (including Michigan, Oregon, New Mexico, Washington, New York, New Jersey, Wisconsin, Illinois, Indiana, Ohio, West Virginia, California) and more people are likely to be quarantined as widespread testing becomes available. These decisions will undoubtedly affect the supply of materials and labor necessary for construction projects.

Officials have turned to increasingly disruptive and measures to control the spread of the virus in addition to event prohibitions and school closures, including restricting people to their homes, and closing businesses that are not “essential.” While many companies have adopted mandatory telecommuting, this is an impossibility on the construction sites. Eventually, supply and labor shortages due to governmental restrictions or quarantines will affect the critical path of construction projects.

Ms. Dye may be contacted at elizabeth.dye@pillsburylaw.com



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