08 Week Eight - Introduction to extension of time and liquidated damages

This set of flashcards covers key concepts related to extension of time, liquidated damages, and other legal aspects in construction contracts.

Date for Completion

The contract planned date when completion is required.

Date of Completion

The actual date when completion occurs, meeting contractual requirements.

Qualifying Delay Event (Extension Event)

A delay caused by an event that qualifies the contractor for an extension of time.

Extension of time regime – Qualifying effect

Contractor's monthly program, critical path delay, and delay analysis.

Extension of time regime hurdles

Qualifying event, qualifying effect, and procedural hurdles.

Extension of time regime – Procedural hurdles

Notice of delay, Notice of intent to make an extension of time claim, Extension of time claim.

Time Bar

A clause that limits the time within which certain contractual rights can be enforced.

State of Queensland v Multiplex Constructions Pty Ltd (1999) 1 Qd R 287

Multiplex claimed an extension of time which Queensland rejected because the claim was not made within 28 days of the beginning of the delay.

Money for time: cost of delay (example)

They apply for an Extension of Time (EOT) of 10 days, which is approved under the contract (passes all hurdles).

Liquidated Damages

Parties can agree to stipulate the amount that a party must pay if it breaches the contract

Why use liquidated damages?

Remove the need to prove actual damage, provide certainty, quantify risk allocation.

The Doctrine of Penalty

The courts will not enforce a liquidated damages clause that amounts to a penalty.

‘Dunlop’ test

Does the clause represent a genuine pre-estimate of the loss that would be incurred?

Introduction to construction law

Contract law, Tort Law (Negligence), Australian Consumer Law (ACL), Key construction-related legislations.

Early Completion Payment

If the Contractor achieves Practical Completion before the Date for Completion, the Principal shall pay the Contractor a bonus of $50,000 for each calendar day of early completion, capped at 20 days.