Five Ways COVID Will Change Contract Glazing Contracts

Few things have had such broad and wide-reaching implications for all aspects of life as COVID-19 has. It has permeated just about every piece of it, including how we conduct business. Contract glaziers are no exception. COVID-19 will force changes in contract language and open items to interpretation that have never even garnered a glance before. Here are some of the areas you’ll want to review in your contracts in light of COVID-19:

  1. Force majeure: Most contracts between general contractors and their glazing subcontractor have exceptions to deadlines, etc., for force majeure. COVID shined a light on exactly what constitutes force majeure. Is it having the virus in your workforce or building? The threat of the virus in either? Is it government intervention that requires you to stop work because you can’t meet their safety requirements? Or because you can’t meet “voluntary” guidelines such as the CDC’s? You will want to spend some time updating your contracts to account for situations where work is “inadvisable” for public health reasons.
  2. Excusable delays: It’s time to review this definition in your contract language too as the traditional definition of  an excusable delay disappears. Should your company be responsible for the new lengthened production and/or shipping schedule of your materials as a result of slowdowns due to COVID?
  3. Changes in the law and/or late penalties: What happens if the law requires shutdowns? Or if it doesn’t? How do you account for situations in which you cannot conduct normal business? Suppose your drivers can’t cross into another state legally without being under quarantine for 14 days? Or the personnel needed onsite to help train others in installation methods are not permitted to travel here from international locations? You’ll need and want language in contracts that accounts for this.
  4. Disruptions in the supply chain: This is by far the most common and concerning result of COVID, especially because of the contract glazier’s inability to predict or control such supplier issues. The difficult problem here is the time-quality-cost trichotomy. If your supplier is two weeks late, it’s probably possible to make up a lot of time through very expensive transportation methods. Who absorbs such costs and how? And what about situations where suppliers are delayed to the point that their pricing increases, or they are unable to produce at all? I’ve already seen a few “COVID surcharges” in my everyday dealings. Post-COVID contracts are just beginning to see language that cites “commercial impracticality” as a justifiable reason for delay.
  5. Indemnities and warranties: Who and how you indemnify takes on new meaning when it involves protecting your employees and other subs from each other health-wise. The timelines you use to identify warranty issues may also be affected. A completed building that remains unoccupied long after it was scheduled to open delays the illumination of any remaining building issues. Similarly, work that was stopped for weeks because of COVID, then started, could have left a building “open” or in a condition it was never intended to be. There can be a cost to this in time, money and quality as well.

    Business interruption insurance is not the answer. The courts currently are littered with lawsuits for companies with claims against insurers who are not paying COVID’s cost, alleging insurance companies have denied claims made under business interruption insurance. I have yet to see a case an insurance company has lost because, in general, business interruption requires a physical action, like a hurricane or power outage, that affected something tangible, like buildings or trucks.

    We may even see new (and most likely extremely expensive) insurance as a result of COVID. But for now, contract glaziers will want to go over every word of their future contracts, paying careful attention to the definitions and contingencies therein. In addition to the human cost, COVID will have a business one and there’s a need for new protections in the future.