This Subcontractor Owed $126,000 For a Delay That Wasn't Theirs
A composite story - details changed, pattern real. Two ordinary clauses: liquidated damages at $2,000/day with no cap, and a 5-business-day absolute time bar on extension of time claims. The builder's own design changes pushed the program out nine weeks. Everyone knew. The notices went in late. The entitlement ceased to exist - and the LD clock ran for 63 days of someone else's delay.
Transcript
This is the story of how a subcontractor came to owe one hundred and twenty six thousand dollars. For a delay that was not theirs.
It is a composite story. Details changed. But the pattern is real, and it is common.
A mechanical subcontractor on a commercial fitout. Good crew. Good work. Good relationship with the builder.
Two clauses in the subcontract. Each one ordinary on its own.
Liquidated damages at two thousand dollars a day. With no cap.
And a five business day time bar on extension of time claims. Absolute.
Mid project, the builder's own design changes pushed the program out nine weeks.
Everyone knew. The delays were discussed on site every single week.
Written notice went in twice. Both times, outside the five day window. Because the conversations felt like enough.
Under the drafting, the entitlement did not weaken. It ceased to exist.
No extension of time meant late completion, on paper. And the liquidated damages clock ran against the subbie. For nine weeks of someone else's delay.
Sixty three days. Two thousand dollars a day. One hundred and twenty six thousand dollars. And no cap to stop it.
Two positions before signature would have changed everything. A cap on the liquidated damages. And a notice period drafted as a requirement, not a bar.
And one habit on site would have beaten both clauses anyway. Written notice, the day the delay started.
The contract did not care who caused the delay. It cared who sent an email by Thursday. Know what you're signing.
General information about Australian subcontracts, not legal advice. Get advice on your own contract and facts.