Civil Engineering Reference
In-Depth Information
time schedule (or as extended under clause 11 or by the adjudicator under
clause 25.2) the architect is to certify to that effect in writing.
Liquidated damages
Clause 11.3, alternative 1, is a common-form provision for liquidated and
ascertained damages. Where alternative 1 is used, the figure stated will be
exhaustive of the employer's rights arising out of delay in completion, even
if third-party claims are made against the employer
654
. Deduction of liquid-
ated damages is subject to the condition precedent of the issue by the
architect of a certificate that the works (or a section) are not fit and ready
for taking-over. Subject to the issue of the certificate and of course to a
written withholding notice in accordance with clause 16.6, the clause per-
mits the employer to deduct liquidated damages at the rate or rates stated in
the time schedule. The period for deduction of liquidated damages runs
from the date of taking over stated in the time schedule, or any adjusted
date, to the date of taking-over (clause 12) or under the provisions of clause
13. If the employer so requires, he may deduct liquidated damages from the
amount that would otherwise be certified as payable to the contractor, or he
may recover them from the contractor as an ordinary debt by legal action.
Unliquidated damages
Alternative 2 of clause 11.3 is a curious provision. It says that, subject to the
issue of a clause 11.2 certificate, the employer is entitled to recover from the
contractor such damage, loss and/or expense as he may suffer arising out of
the contractor's failure to meet his obligations under clause 11.1. At first
sight, it would appear that if the contractor is in breach of
any
of his
obligations under clause 11.1, so that he is liable to the employer for
damages, these are recoverable by deduction under this clause and without
resort to arbitration. However, the side-note refers to 'damages for delay',
and it is clearly the draftsman's intention that the employer's right to set off
unliquidated damages is limited to the breach of late completion. How such
damages are to be assessed is not stated; but they are the equivalent of
unliquidated damages at common law, which are recoverable
on proof of
actual loss
. What this version of clause 11.3 does, however, is to confer on the
employer a right to deduct such damage, loss and/or expense from the
amount which would otherwise be payable to the contractor in any certifi-
cate, i.e. it confers an express right of set-off on the employer who, presum-
ably, will quantify the amount himself or through his professional advisers.
The wording of the clause is very broad and the use of this optional provi-
sion appears to be contrary to the interests of contractors, who might be well
advised to resist it. It represents a startling departure from the accepted
654
Temloc Ltd
v.
Errill Properties Ltd
(1987) 39 BLR 30.
