AboutPeter M. Elliott Expertise First response to queries regarding extensions of time, variations orders, site instructions and payment using FIDIC and other forms of Conditions of Contract, based on English Law, and derivatives only.
Experience Value . . .
It's unwise to pay too much, but it's unwise to pay too little. When you pay too much you lose a little money, that is all. When you pay too little, you sometimes lose everything, because the thing you bought was incapable of doing the thing you bought it to do.
The common law of business balance prohibits paying a little and getting a lot. It can't be done. If you deal with the lowest bidder, it's well to add something for the risk you run.
And if you do that, you will have enough to pay for something better.
. . . John Ruskin (1819 - 1900)
"We are too poor to buy something cheap"
.Romanian Proverb 2002
A lean compromise is better than a fat lawsuit.
George Herbert (English poet 1593-1633)
I said it in Hebrew, I said it in Dutch,
I said it in German and Greek:
But I wholly forgot (and it vexes me much)
That English is what you speak!" Hunting of the Snark - Lewis Caroll
Match your presentation to the reader!
The joy of food lasts but an hour, of sleep but a day, of a woman, but a month, but the joy of a building lasts a lifetime. Syrian proverb.
Comments and observations leading to improvements in the translation of FIDIC Red & Yellow books into Romanian prior to approval by FIDIC (reference 'Preface to the Romanian edition')
Question We have an owner who is trying to charge us liquidated damages for not completing the "punch list" within a 30 day time frame. The amount now exceeds the total value of the items they claim are not completed. Is it legal in Oklahoma to charge ld's when the owner has beneficial occupancy of the facility and if not, how would we defend. (case law?)
Answer Hi Kathy,
I have no knowledge of the law in Oklahoma, but I will try to give some general guidelines on how to proceed with this case. You do not say by how much the 30 days has been exceeded, so there may be an element of penalty in the enforcement of the liquid damages.
Firstly, do not discuss any aspect of the liquidated damages, including the basis for calculating them, until later, as any discussion may imply the right of the client to impose such damages.
I assume that you have a written contract, which may follow one of the standard forms, or even your own terms of sale. Generally, there is case law, or even books related to that particular form of contract, available from the local architects association, or similar. Have a look on the internet. I will have to leave that part to you as you do not state the form of contract.
On what basis is the client imposing liquidated damages? Is there any provision in the Contract for such damages? Generally liquidated damages are defined in the tender documents and are based on the extra costs arising out of non-availability of a construction. For example if a building is not finished on time and the owner loses rental income or has to rent other property until the project is finished. If the client has beneficial use, then liquidated damages should not be applied or should be reduced relative to the value of the work outstanding. If the client has no extra costs, then it would be difficult to justify liquidated damages and it could be argued that the pre-contract estimate of liquidated damages is inaccurate and the client is imposing a penalty, which may be contrary to your contract. Has the completion certificate been issued? Has practical completion been achieved?
Is there a valid reason why the punch list was not completed in time, either within your control or without? Do you have any justification for an extension of time due to force majeure or delays or changes caused by the client? It sounds as if there has been a breakdown in communications and the client is showing his frustration with your delays. You may have to build some bridges or mend some fences.
I hope the above comments have helped to define your problem more clearly, but it looks as if you need specialist advice. If I have misunderstood anything, then please send me a follow up question.
