Failure to Follow Agreed Cchedule Not Ground for Damages

Many people have experienced the frustration of having builders who turn up, partially complete the work they have been contracted to do and then seemingly lose interest, with the result that the original expectations as regards timing of the work go out of the window.

One might expect that if a contract is silent on completion dates, there would be an obligation on the firm carrying out the work to do so diligently and in a regular manner, but a recent dispute on this point between a building firm and a subcontractor shows that this is not the case.

It concerned a contract for groundworks. Alongside the contract, an ‘activity schedule’ had been prepared, which it was accepted was not legally binding. The groundworks lagged well behind the target dates set out in the activity schedule. The builder sought to withhold part of the payments due under the contract as damages for losses it had suffered due to the delay, arguing that the subcontractor had an implied obligation to proceed ‘regularly and diligently’ with the works.

However, in the absence of a contractual schedule, the court would not imply into the contract a term that was not necessary to make the contract ‘work’. The contract stipulated that if it was completed late, damages would be payable. That was enforceable but there was no implied clause regarding meeting milestones along the way.

The important lesson to be learned here is that if you are commissioning building work and need intermediate targets to be hit (rather than just an agreed final completion date), make sure these are included in the contract. There are dangers to doing this especially if you change the work being done or the works are delayed because you cannot, for example, produce the special fire place that you are obliged to provide so be careful and consider taking advice.

Contact Hugh Nicholls for advice on any construction or property related matter.