In order to implement the Government’s social distancing rules the CLC has now issued new operating procedures for construction sites:
Academic Year 2019/2020
secretary of state letter construction industry
Julian Critchlow
Construction Specialist
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Liquidated damages clauses are standard features of construction contracts. They fix, in advance, the sum payable for late completion, sparing the innocent party the burden of proving its actual loss and giving the contractor certainty as to its exposure. When projects overrun and deductions follow, paying parties sometimes seek to argue that the clause is a penalty and therefore unenforceable. The argument is raised often. It succeeds rarely. Understanding why helps both in drafting clauses that stand up and in giving realistic advice on whether a challenge is worth pursuing.
Construction projects begin with a clear vision. Disputes arise when expectations, paperwork, and the realities on site fall out of step. Most problems cluster around three themes: who pays what and when, whether the works finish on time, and whether the finished site meets the agreed standard. Getting the basics right early prevents small issues turning into costly disputes.
The Government’s consultation marks the most ambitious attempt in decades to reform payment in construction. These developments herald substantial change in contract drafting, advisory practice, and dispute resolution. The reforms may carry costs and risks, but they represent a determined attempt to resolve problems that have dogged construction for generations.
