As employers and contractors grapple with the direct and indirect impact of the conflict in Ukraine, increasing economic sanctions and supply chain fragmentation, the challenges faced by parties in performing their obligations under construction contracts remain high. In some cases the impact is very direct – the recent destruction of the giant and privately owned An-225 Mriya cargo aircraft on the ground at Hostomel means that the unique aircraft is no longer available to air-freight heavy equipment around the world. In other respects, the effect is less direct but nonetheless severe, such as the impact on certain metal prices. 

And of course, anyone resuming travel from Europe to Asia will find their flight path and therefore journey time may have changed significantly through the avoidance of Russian airspace. As Building readers will have found during the pandemic, the complexity of modern supply chains may mean your project is impacted in ways you could not foresee.

In Building recently, Roberta Downey discussed the impact of the war on supply chains. This article builds on that by considering what contractual clauses will come into play. The construction sector is concerned about the impact of a major event on the enforcement of obligations under contracts and when relief from performance is available.

Read more …