Employer Claims Against the Contractor

The majority of claims made under building contracts are made by the contracting party against their employer. The most common claim that an employer will raise against a contractor is to recover its additional costs or losses because the contractor has failed to complete the works by the ‘completion date’, in other words ‘damages for late completion’, or ‘delay damages’. Under most building contracts, the employer's ability to claim ‘damages for late completion’ provides additional protection against defective, or non-compliant work. Contractors are concerned by having to pay liquidated damages, as sums claimed by employer can be ruinously expensive and have catastrophic effects on a contractor's financial position. The chapter illustrates the procedures with which the employer must comply, in order to be entitled to deduct liquidated damages under the JCT 2016 and NEC4 standard forms of building contract. The majority of claims by employers are for delay damages and defective work.