Construction Law/Employer's Claim under Sub-Clause 2.5
I am working with the consultant firm on a contract based on FIDIC 1999 conditions of Contract. The Contractor has failed to complete the Works within the Scheduled Time for Completion and time is at large. The Employer has notified under Sub-Clause 2.5 for deduction of Delay Damages. Sub-Clause 8.7 states that “ the Contractor shall subject to notice under Sub-Clause 2.5 pay delay damages to the Employer for this default”. My questions are as follows;
(i) Should the Delay Damages be deducted just by passing the Scheduled Time for Completion or the Employer has to wait until the issuance of TOC for the Works which will define the delay period?
(ii) If the Delay Damages are deducted before issuance of TOC and then afterward an EOT is awarded, then the Contractor is to be entitled for the compensation of the deducted amount for the awarded time period?
Thank you for this question.
The first part that I note is that a Contractor's failure to complete within the scheduled Time for Completion does not make time at large. I ask, therefore, that you clarify your position on this,
In respect of the Employer's claim for delay damages, the Contract is silent on when the Employer can make the claim; however where, as in your circumstances, the tome for completion has passed already, I do not see any problem with the Employer making its claim.
Once word of caution however is that if the Contractor has made EoT claims which have not been determined the Employer's right to claim delay damages may have been postponed or even lost. Your further comment on this would be appreciated to allow me to consider further.
I hope that this assists you.
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