Construction and engineering briefing — issues concerning completion

Time is a fundamentally important consideration in every construction and engineering project. There is always a focus on ensuring that completion occurs on time. Generally, the contract will provide for liquidated damages to be paid if completion does not occur by the specified contractual completion date. What happens, however, if completion occurs too soon or if liquidated damages are not correctly dealt with in the contract?

Most standard form contracts do not define “completion” or “practical completion”, unless a definition is specifically included. The generally accepted proposition is that “practical completion” occurs when there are no apparent defects in the works and all that is outstanding are very minor (de minimis) items of work. Even where practical completion is defined it is still a very subjective concept.

Under English and Scots law, “liquidated damages” should represent a genuine pre-estimate of the loss which the employer is likely to suffer as a result of the delay for which the contractor is to be responsible…

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