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

[Andehh]

Via PM I have been reminded i never updated this thread, and to avoid that annoying situation when someone tells of their problem...but not how resolved, ill update here. Coming up to +2 years on now!!! Excuse the rush, got a busy day in the garden I want to get into...excuse grammar & spelling.

 

The builder met with the architects first to put forwards his opening position, prior to me meeting with them. Before this I had very firmly coached the architects on my expectations.  The builder & architect had a long list previous projects, but my prior engagements with them both over the build didn't overly (!) worry me about it...but obvious bias is inevitable, the industry works off it.

 

When I met with the architects, with my view being I wanted 50% of our costs refunded for the delay (£5,000 to £7,500)...following the initial niceties they updated me with a ''following our initial negotiations with the builder have had us come to a middle ground of....you paying c£5,000 for the 9 month ish delay' . Suffice to say I ''politely'' went through the roof. I was furious of that as an argument & after much ''polite'' fury directed at the situation, I Iet them explain why....and it basically came down to the fact we chosen/walked c10-15% additional cost into the project (with another c10% what we paid over the fact due to inbuild problems) over the duration over & above original agreement (family bereavement mid build meant we put the money into the builder), some line items individually adding a few weeks to critical path without breaking a sweat. The vast majority being relatively 'small ticket' items ('extra retaining wall round patio, wood burner fireplace... 60-70 line items on the cost sheets) but they did chip away at any argument we had for the delays being because of ''builder's slow progress''.

 

They also acknowledged that Builder was third generation, family firm...and that we have benefitted immeasurable from his professionalism & experience dodging, resolving and fixing headaches along the project as successfully as he had & the great working relationship we had....and the 'hang over' to that is from an evidence lead approach to this negotiation, any mediation or formal resolutions to this situation would have him in a powerful position to professionally explain, with ample justifications, his position to this settlement.

 

Needless to say I threw this out the window and assured them even a penny more then a ''call it quits position of £0'' would have me expecting a detailed line item by line item, evidenced position, protracted negotiation, in person for every £ & penny..... knowing full well that the Builder utterly HATED anything that wasn't a short, polite, value add, straight to the point, no bullshit or emotions type conversation....which id benefited from before via plenty of phone calls with me going ''I disagree Builder, Id like you on site to discuss this in more detailed please...when can you be available.....'' which inevitably had him sighing & just agreeing to meet ££ half way. Needless to say, this is how this situation went again.... Everyone agreed to ''call it quits at £0'' and walk away with a balloon, even if they didnt get the party bag they wanted. 

 

I'm sure Builder & architect knew this would be the end position, but needed to 'put on the show' for me....but I was happy with how it all ended. Sometimes the game simply needs to be played, even if the result is pre determined. Ironically enough though, just this Friday gone (without any fight) the builder's team came out for 2 days to replace a slab of the garage floor due to cracks, because they acknowledged their contractor had ballsed it up....no hesitation even 12 months past the snagging point. 

 

So...... all ended happily ever after, even if at the time the emotions felt/feel very very heavy indeed!!! For those in a similar circumstance, trust me when I say whatever happens, it will all be worth it & the hotter the the fire...the better the story you can tell with a beer & plenty of laughter!!   Also, projects rarely ''fully finish'' and knowing you part ways with a (good!) builder knowing you can pick up the phone to him when all is said & done, carries value in itself. 

Edited March 29 by Andehh

[Mike]

Thanks for the update - good to know that it ended well :)

[saveasteading]

@Andehh

Thanks for the closure summary.

 

Would you have any advice for anyone considering a similar project?

OR what might you do differently another time? 

[Mr Punter]

Am I right to summarise that you wanted a £15k discount, your builder, who did a very good job and is honest and diligent, disagreed, so you have dropped the matter?