REALWorld Law

Construction

Delay

Is it possible for the parties to a construction contract to agree that the time/date for completion of the works is to be fixed? How would delay be dealt with?

Belgium

Belgium

It is common to impose in a contract a time frame for completion of the works. Where a date for completion of the works is agreed between the parties but completion does not occur on that agreed date, this will automatically imply a contractual default by the contractor. If a delay is not contractually agreed upon, a judge will determine a reasonable delay in case of dispute.

In general, a penalty mechanism in case of delay is contractually foreseen and therefore delay is dealt with in the relevant contractual document. Contracts generally foresee penalty payments for delays in the execution of the works, or for intermediary delays to agreed milestones. The contract generally specifies a lump sum damages amount per day of delay. If a “liquidated damages” clause is manifestly unreasonable, a judge may reduce the amount of the penalty, taking into account all circumstances, including actual and potential damage suffered and the legitimate interest of the claimant. The clause may not be mitigated below a minimum level that is to be considered reasonable.

The delay penalty is generally without prejudice to the principal’s right to claim any other damages on the basis of other contractual clauses.