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CLAUSE 43/39 : DATE FOR COMPLETION

43.1 Contractor should complete the whole of the works on or before the date for completion.

43.2 The contractor shall notify the S.O. in writing to the effect, if the contractor considers that
the works have achieved practical completion.

43.3 The S.O. shall carry out testing of the works within 14 days of receipt of such notice.
Pursuant to such inspection, the S.O. shall :

a) The date of such completion shall be certified by the S.O. and such date shall be the date of
The Defects Liability Period as provided in clause 48.
b) Contractor should complete specifying al defective works before the issuance of the
Certificate of Practical Completion.

43.4 No Certificate of Practical Completion shall be issued to the contractor until effectively
carried out the remedial work within reasonable period to satisfaction of the S.O. if the S.O. has
given instruction pursuant to clause 43.3(b).

43.5 The works shall not be regarded as practically complete unless it has fulfilled yhe following:

a) The works have been completed I accordance with the terms and conditions of this contract.
b) The government can have full, proper and beneficial use of the works for their intended
purpose, not withstanding that there may be works of a very minor defects provided that
such works do not prevent or diminish the full, proper and beneficial use as aforesaid.
c) Commission tests in Contract Document should be passed by the work.
d) For occupation, the works shall be made available to the Government in a condition fit.
e) All the essential services, including access roads, landscape, car parks, drains, water and
electricity installation, fire hydrant, sewerage and refuse disposal equipment and fire lifts
specified in this contract.

43.6 The date of such completion shall be certified by him and such date shall be the date of the
commencement of the Defects Liability Period as provided in clause 48 which explain about defects
after completion when the whole of the Works have reached practical completion to satisfaction of
S.O.
Relate the clause to principles of contract law or elements of contract.
One of the primary purposes of extension of time clauses in contracts is to preserve the
effectiveness of the liquidated damages provisions for the benefit of the employer. Liquidated
damages are a reasonable pre-estimate of the losses the employer is likely to incur if work is
completed late. Such sums are enforceable if the contractor completes late due to his own default.

The basic essence of liquidated damages is that they represent a genuine pre-assessment of
the likely loss that will flow from the breach of contract in question. Its aim is to place the innocent
party in the position he would have occupied had the contract been performed without a breach.

Clause 24 of the JCT includes the liquidated damages provision which serves the interest of
both the contractor and the employer. Liquidated damages enable the contractor to ascertain in
advance his liability to the employer for late completion and in doing so assist him to calculate
whether, in commercial terms, it would be worth making an extra effort to avoid late completion.
The liquidated damages provision would also provide the employer the security of receiving
immediate payment in the event of a delay owing to the contractor, and also serve as an incentive to
the contractor to finish in time.
Importance of Effect of Date for Completion in Construction Contract.

When the completion date is of significant economic importance to the owner, additional
pressure can be applied by charging the contractor for overrunning the established date or by
rewarding early completion. These ends may be accomplished by inclusion of a liquidated damages
and/or bonus clause in the agreement.

Most construction contracts set a date by which the works described in the contract must be
completed. This is not the date by which all obligations under the contract have to be discharged,
but the date by which 'practical completion' must be certified. That is, the date by which the works
have been completed and the client can take possession of the site, albeit there may be very minor
items outstanding that do not affect beneficial occupancy by the client.

Certifying practical completion (referred to as 'substantial completion' on some forms of


contract) returns possession of the site to the client, releases half of the retention, ends the
contractor's liability for liquidated damages and signifies the beginning of the defects liability period.
The defects liability period (sometimes called the rectification period) typically lasts six to twelve
months during which the client may occupy the premises and the contractor must rectify any defects
that are identified.

The completion date may be altered during the course of the contract, for example if the
date the contractor takes possession of the site to begin construction is delayed, or if an extension of
time is granted due to delays to the works that are not the contractors fault. Practical completion
therefore must be certified by the most recently agreed completion date.

If practical completion is not certified by the most recently agreed completion date, then the
contractor may be liable to pay liquidated and ascertained damages to the client. These are pre-
determined damages set at the time that the contract is entered into, based on a calculation of the
actual loss that the client is likely to incur if the contractor fails to meet the completion date. Some
contracts require that a certificate of non-completion is issued as a pre-requisite to deducting
liquidated and ascertained damages.

Where the contract requires sectional completion of the works, then separate dates for
completion and separate rates of liquidated and ascertained damages should be set for each section.
NB There can be a cascade effect, where delays in one section cause delays in another. The
contractor may then be liable to pay liquidated and ascertained damages for each section.

On construction management contracts, a separate completion date must be set for each
trade contract. Once all trade contracts have been certified as practically complete, the construction
manager issues a certificate or project completion. The same is true on management contracts,
where each works contract must be dealt with individually
How this clause can help to create good practical of contract management.

Accordingly the contractor is under the legal obligation to comply with the agreed time- limit and
handover the project. Time being of essence in contract, failure by contractor to handover within the
agreed time-frame could trigger a claim for liquidated damages from the employer.

Preventive principle is common law principle applied to protect contractors (from potential claims
involving liquidated damages against them) from delay caused by act of employers who prevent
(deliberately or otherwise) timely completion of project work(s).

a) Obligation to complete by a particular date

In all three jurisdictions the subject of this paper the


various forms of contract in common use require the contractor to reach a specified level of
completion (such as practical completion, mechanical completion or substantial completion)
by a specified time.

b) Properly drawn construction contracts must give the contractor a right to an extension of
time
Pursuant to common law, where there has been delay to completion caused by an act or omission of
the owner, unless the contract provides a mechanism by which that delay

In most construction contracts, the risk of delay is shared between the owner and the contractor.
The allocation of risk is determined by the type of delay actually suffered. Hence, this paper divides
delays into three types:
delays caused by the owner or contract administrator;
delays caused by events beyond the control of all parties (i.e., neutral delays); and
delays that result from the acts or omissions of the contractor or otherwise delays in respect
of which the contractor has accepted the risk.