Advice on Building Delays and Liquidated Damages

A domestic building contract needs to be clear and contain a definite completion date for each stage of the building work.

More often than not, no fixed date is stated but instead the completion date is stated in the number of days.

When entering into a building contract the Owner should consider the amount allowed for liquidated damages within the contract. If the building work is delayed, which happens all too often, then the Owner will incur additional costs with respect to interest being paid on building finance and/or accommodation prior to completion.  The amount allowed for liquidated damages should take into consideration these costs.

It is vital that both the Builder and Owner monitor the progress of the building work vigilantly. If the building schedule falls behind, an experienced solicitor can intervene and work with both parties to get the construction schedule back on track or alternatively work to revise the schedule to take into account unanticipated circumstances.

In practice it appears that if any amount is awarded by the Tribunal and an allowance is made pursuant to a domestic building contract for liquidated damages, then the amount awarded will rarely exceed the liquidated damages amount.

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