Wrapping up contract and liquidated damages

[Andehh]

We approach the end of our contract, builder has been very very good throughout. Never cheap, but has otherwise been professional, diligent and easy to engage with throughout. Very experienced, 3rd generation family firm etc. He is one of the good guys, expensive but worth it 

 

However, project took several months longer then it should have. No obvious reason why, just a complicated design and lots of small delays here and there throughout.... As well as builder juggling multiple big projects. Slow and steady. 

 

We do have liquidated damages for delays in the contract, to the tune of £15k ish. 

 

Initial rumblings from architects (who started off fantastic, staff change meant they've been very disappointing for last 1/3rd of contract) are suggesting builder is saying his prelims from the delays are significantly more then our liquidated damages, so let's just call it quits,as an opening position. 

 

I've pushed firmly back to them saying no, his prelims are due to delays, but delays were at least 50% due to him spreading resource thinly across multiple projects. I want to push him on this. (I can't prove though) 

 

Now builders experience, when on our side, has proven invaluable. However, now we are going to need to negotiate liquidated damages 'against him' means he is going to be typically outstanding at managing through it.... Against us!! 

 

Architects will do the heavy lift, but I'm going to be say next to them throughout to ensure they earn their money. 

 

Any tips or advice? How best to counter the argument of his prelims v liquidated damages, call it quits? 

 

We're not expecting much back (he has been so good, we feel we got a fair deal without them) , but would like to try our hand none the less! 

[saveasteading]

I've been on both sides of this.

Even if the contract allows adjudication, you will end up with high fees and the risk of paying his too.

 

Have a quiet think about this as if you were the adjudicator......and remember their job is to resolve, not punish.

Look at your best case on damages, and the builders best case on resisting these and justifiable extensions of time and extras.

Take one from the other, allow costs, and ....I forecast that you call it quits.

If the builder then decides you have gone soft and he will sue you, then you have done your homework already.

 

Another exercise is to do the same list but with best and worst outcomes too.

 

I have had several nasty / opportunist clients try to avoid the last payments. Even when, nearly always, the adjudicator agrees we are in the right, it all ends up costing money, time and aggravation. It cost our clients more. 

[Andehh]

Thanks saveasteading. Out of 'principle' (dangerous word...) I feel something is due to us, but then the builder, his team and the attitude they've all had (positive & supportive) since day one forgives an awful lot of sins.....

 

One we will think about over the next week or two as we approach it. Ill post back with how it goes for others.

[Alan Ambrose]

Maybe a polite informal chat with them? You still want them to do snagging and maybe other jobs in the future. Politely suggest a compromise based on the various parties actual costs?

[Dave Jones]

pays to keep them onside in case you need them back for snagging at some point.

[TonyT]

It’s been difficult to get materials in a timely manner, so I feel for both sides of this situation.

Juggling labour across

multiple sites is just a good way of keeping everyone happy

 

its not easy being a builder!

 

[Jilly]

If they are good, I’d suck it up, as others said, you still might possibly need them back at some point, especially if you can afford it. How about meeting half way? 

[ETC]

Flogging a dead horse comes to mind. Why do you think you are due LDs? Was this a JCT Contract with a pre-determined completion date and was an extension of time requested or granted.

 

As other posters have said - you will need to keep the contractor on side to carry out any remedial works.

Edited July 17, 2023 by ETC