Time At Large
Whenever there is delay in a construction project, parties immediately look to the liquidated damages clause. This is understandable, as the Contractor carries the risk of delay resulting from events for which it is responsible, and that risk is usually quantified by the provision of liquidated damages.
However, where such events are caused by an act or omission by the Employer, the Employer bears the risk. In such event, unless there is a clear mechanism for extending the time for completion, the Employer’s right to levy liquidated damages will fall away.
It is for this reason that most standard form contracts usually provide for an extension of time mechanism which allows for the time for completion to be extended upon an event of prevention or impediment by the Employer. The purpose is primarily to enable the Employer to protect its right to potential liquidated damages in the event of its own default. [Read more…]