REALWorld Law



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?



It is common to impose 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.

In general, a penalty mechanism in the event of delay is provided for contractually. Delay penalties are calculated by multiplying the contract price by the rate of delay damages, and are payable unless the delay was due to force majeure/unforeseen event, or was the fault of the owner. Delay penalties are often capped at a percentage of the price of the contractor agreement but may be revised by the court.