DLDs FAQs
| What are the general rules for DLDs? | - Liquidated damages can only be recovered if they are a genuine pre-estimate of the likely loss to be suffered by the employer in the event of a delay. - Normally, DLDs are the employer's complete and sole remedy for delay. - Generally, Extension of time clauses are construed strictly against the employer so that if a delaying event occurs, which is the fault or responsibility of the employer, and which is not catered for in the extension of time clause, then the extension of time clause will cease to operate, the fixed date for completion will be discharged, and the contractor will have a reasonable time for the completion of the works. -If the contractor has failed to complete by the fixed date for completion, the employer does not have to prove its actual losses arising from the delay. |
| The Employer has deducted DLDs, what can we do? | A lot depends on the wording of the contract. However, the two main defence points for the recovery of DLDs are the breach of contract by the Employer, or a counter-claim for additional time & costs by the Contractor. |
| What is an Extension of Time? |
Generally, extensions of time for the relevant contract completion dates are granted by the Employer, if culpable, in order to preserve the Employer's rights & remedies under the contract. The EoT has to be agreed with the Contractor and should be reasonable. However, the Contractor has no automatic right to recover any associated costs. It all depends on the contract terms & conditions. |
| The Employer has granted some extra time but it's not enough, what can we do? | The extension of time must be reasonable considering all the circumstances. Contractors are not obliged to stick to the original durations when re-scheduling the works. Also changes to the contract must be agreed in order to be binding. |