In the course of 2025, the momentum will quickly win when the Gray Reed Construction Team and I experience a large influx of construction contracts for checking and = redline for negotiations. In every consecutive week, more and more at every level, including owners -> GC, GC -> subcontractor and supplier/manufacturer -> contractor. Since so many work and the uncertainty of the constantly changing market conditions for owners of industrial infrastructure projects are of crucial importance, it remains important that there are properly negotiated contractual provisions and contractual administrative practices, since the sales returns of the ultimate success characters are.
Damage
How do owners of industrial infrastructure projects in the event of unexpected delays protect themselves from a perspective of damages? It begins with the effective negotiation of the construction contract at the front of the project. As a rule, there are 3 paths to compensation in the course of the contract negotiation between owners and contractors. The most common type of damage accepted by all parties are actual damage, while follow-up and special damage are more often negotiated from the contract by one-sided or mutual waiver. The last and perhaps most frequently viewed, discussed and feared damage are, as explained in an earlier blog post.
The legal problems that affect these concerns are obvious:
- Defined final date and well -kept schedule
- Liquide or consequential damage
- Requirements for extensions of the time
- Defined excusable and non -excuse delays
- Liability restriction
- Non-damage damage for delays
- acceleration
Limited damage should be predictable to the owner and the contractor that the financial consequence of a timely project is not completed. Since potential damage should compensate the owner for his “damage”, which result from a delayed project that can predict difficult or impossible in the contract phase, you must be bound by the actual costs and damage of the owner, costs, lost business opportunities and more. The advantage for = owners of liquidated damage is that they offer predictability and are more easier to prove and recover.
The following damage is essentially a measure of inexpensive damage, in addition to often more difficult to prove, especially without a compensation expert and also nebulous. The owners should expect an application from contractors to forego consequential damage by the contract. In anticipation of this, it is the best practice of the owners to be prepared with a well -triggered compensation supply and in an adequately enforceable amount. Regardless of this, no owner should leave the house without at least having liquidated or consequential damage in the context of his contract.
Stay on it
This is the continuation of a series of articles that relate to what industrial owners must take into account when protecting their economic interests in the timely completion of critical construction projects. Pay attention to my article next month if I discuss (or subscribe) the requirements for extension extension.
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