Time-keeping bonus

3 December 2012

Although we have accepted a quotation from a builder for a large extension to our house, we are a bit concerned. This firm has carried out a lot of work in our area and has a reputation for fair prices and good workmanship. But he is also renowned for going missing for a couple of days and not completing the work on time. He has assured us that this won’t happen; is there any way we make sure of this?

Answers

On large building contracts, a system of liquidated damages is enforced where the contractor is liable to pay weekly damages for delays that he has caused. But the damages must represent the assessed losses suffered by the client and not just be a penalty. If the completion date is that important, consider offering a bonus for completing on time. It’s worth letting the builder know you’re keeping a diary of the project so that he knows that slipping off to do other work will be noted. Finally, make sure that you don’t overpay him, particularly in the early stages – an overpayment can lead to a lack of commitment.

3 December 2012

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