What happens if the owner causes delay and there is no extension of time clause?
Under the prevention principle, the owner cannot hold the contractor to a completion date that the owner's own acts made impossible. If the contract has no mechanism to extend time for that kind of act, time may be set at large. The contractor must then finish within a reasonable time, and the owner can only claim general damages for proven loss, not liquidated damages. Jurong Primewide v Crescendas Bionics [2019] SGCA 63 illustrates this.
From the RRD Field Guide, checked against the sources cited in Liquidated Damages and Extension of Time in Singapore: An Owner's and Contractor's Guide. General information, not advice for your project.
The fuller picture
In Singapore, a liquidated damages clause is enforceable if it is a genuine pre-estimate of loss and not a penalty; the Court of Appeal in Denka Advantech (2020) kept the traditional Dunlop test and declined the UK Cavendish approach. LDs only run for delay the contractor is responsible for, so the contract needs a clear extension-of-time clause, notice rules and a certification step.
More questions on this topic
- Are liquidated damages enforceable in Singapore?
- Does the owner have to prove actual loss to claim LDs?
- If the contractor misses the EOT notice deadline, is time at large?
- How is concurrent delay treated in Singapore?
- Should a small fit-out contract have liquidated damages?
- Can LDs be deducted from a progress payment under SOPA?
- Are LDs capped?