What hardship provisions can and cannot do for time and efficiency claims under Nigerian law and the FIDIC suite
Few words are used as loosely in construction as “hardship.” It is reached for whenever a project turns painful: could be due to a price spike, a stalled approval, a collapse in productivity, as though it were a catch-all remedy. It is not. In contract law hardship has a precise meaning, and confusing it with the ordinary delay-and-disruption machinery, or with force majeure, leads parties to claim the wrong thing under the wrong clause. The cleanest way to hold the distinctions apart is this: force majeure excuses performance and presses pause, frustration discharges the contract, and hardship adapts the bargain, by obliging parties to return to the table and renegotiate. The price adjustment clause does the same job through a pre-agreed formula.
Why hardship should be drafted in
Hardship is defined by UNIDROIT principles, as a situation where a party who claims is entitled to a renegotiation of terms, and in the absence of agreement, to rescind the contract or to amend it, on “just terms” wherever possible. The hardship must be substantial but not severe enough as required for the application of common law doctrines of impossibility or commercial impracticability.
That distinction matters more in Nigeria than in civil-law systems, because the common law we apply is hostile to a default doctrine of hardship. There is no general doctrine relieving a party simply because performance has become more expensive or onerous. The nearest doctrine, frustration, sets a famously high bar: it needs a supervening event that makes performance impossible or radically different from what was promised, not merely harder or less profitable. (This is the principle associated withLord Radcliffe in Davis Contractors v Fareham UDC [1956] AC 696. See also Supreme Court decision in Araka v Monier Construction Co. Nigeria Ltd [1978] 2 SC 99). Increased cost, even severe cost, does not frustrate a contract. The consequence is decisive: in a Nigerian or FIDIC contract, hardship relief exists only to the extent the parties expressly draft it in. Where the clause is absent, the risk lies where it falls, and the common-law right of set-off means that, by default, the advantage usually sits with the paying party.
Two categories that behave differently: delay and disruption
Before turning to the clauses, two categories must be kept apart, because they generate entitlements differently. Delay is time-related: the question is who owns the lost time and who pays for it, whether the contractor earns an extension of time, relieving it of liquidated damages, and, separately, recovers prolongation cost. Disruption is efficiency-related: the works still advance, but less productively, labour working out of sequence or in congested conditions, the cumulative drag of many changes. Disruption frequently does not move the completion date at all, so it is invisible to the extension-of-time machinery and surfaces only as a money claim for lost productivity. Many contracts handle disruption poorly, and that gap is precisely where a well-drafted change-in-circumstances or hardship clause earns its keep.
Whatever the category, every relief provision shares the same skeleton: a defined trigger -> a notice, often a condition precedent -> a defined consequence: time, money, renegotiation, suspension or termination -> and an allocation of who bears the residual risk, and up to what limit. Entitlement and liability are simply the two faces of that allocation.
The provisions, precisely:
- Extension of time. The core delay provision: on a defined excusable event the completion date moves and liquidated damages fall away for that period. Under FIDIC it is sub-clause 8.4, gated by the sub-clause 20.1 notice as a condition precedent. Note the split between events that give time only such as exceptional weather, and employer-risk events that give time and money.
- Force majeure, FIDIC’s “Exceptional Events.” Events beyond a party’s control that prevent performance: war, natural catastrophe, epidemic. The consequence is suspension and an extension of time, limited cost in defined cases, and a right to terminate if the event persists beyond a long-stop. This is relief from liability not adaptation, it pauses or ends the contract; it does not rebalance it.
- Change in legislation. Adjusts time and price for post-tender changes in law, taxes, duties or permits. Directly relevant in Nigeria, where regulatory and foreign-exchange shifts are real and frequent, it places legislative risk on the employer, who is better placed to bear it.
- Price adjustment/fluctuation. The principal hardship-adjacent device for cost shocks. An indexed formula (FIDIC sub-clause 13.8) adjusts the price for movements in the cost of labour, materials and fuel. This is how the equilibrium problem is solved on most projects in practice, automatically, without a renegotiation dispute, sharing inflation risk rather than dumping it on the contractor.
- The hardship clause proper. An express clause defining a hardship event: unforeseeable, beyond control, fundamentally altering the contract’s equilibrium and rendering performance excessively onerous, and obliging the parties to renegotiate in good faith to restore balance, with a fallback (expert or tribunal adaptation, suspension, or termination) if they cannot. The ICC Hardship Clause is the off-the-shelf model. Here neither party simply wins: the risk of the supervening event is shared by adjustment.
- Variation. The everyday engine of change, entitling the contractor to valuation of time and money for instructed work. Its overlooked role is in disruption: the cumulative impact of many variations is itself a productivity claim, and the clause should expressly preserve the right to claim that cumulative loss, otherwise employers argue each change was individually priced and disruption is excluded.
- Suspension. This allows a party pause lawfully rather than breach; the employer for convenience, compensating the contractor, or the contractor for non-payment under FIDIC sub-clause 16.1. It converts what would be a delay-and-breach fight into a managed, compensated stoppage.
- Notice, records and liability caps. Unglamorous but decisive. Notice clauses set the deadlines for making a claim, and missing them can sink an otherwise good claim. Records are the proof a disruption claim stands or falls on. On the other side, caps on liability, exclusions of indirect loss and sole-remedy damages clauses limit what a party can recover, the employer’s way of taking back some of the risk the other clauses gave away.
Putting it together
Read together, these provisions answer the question precisely. For delay, the live clauses are extension of time, force majeure, change in law, suspension and liquidated damages, and the contractor’s entitlement to time is usually separable from its entitlement to money. For disruption, the workhorses are the variation clause, an express loss-of-productivity entitlement, change in law and, decisively, the records-and-notice regime, because disruption is proved by measured productivity loss rather than a moved date. For the true equilibrium shocks that neither delay nor disruption clauses capture, the price-adjustment formula and the express hardship clause do the work, sharing the burden instead of excusing or ending performance.
The drafting lesson for Nigerian and FIDIC projects is therefore straightforward. Hardship is not a doctrine to be relied on after the fact; it is a provision the parties either negotiated in or did without. Those who fare best when a project turns painful are not the parties with the strongest grievance, but the parties whose contract already said, clearly, and in advance, who carries which risk, on what notice, and to what limit.
