Delay Damages Applied under X7

Hopefully a simple one…

We are currently working for a client on an NEC4 Option A contract. We are beyond the current contract completion date as a result of delays to the works. The delays have not yet been fully reconciled as contractor or clients liability, as we are discussing the principle of the time related events that have occurred. The contract has Option X7 included and so the client has already started applying the delay damages on the latest payment certificate.

I think this is a tad early purely down to the fact that the CEs are not yet agreed and are still being discussed and any implementation would mean the client would need to pay interest on any repayment as a result of moving the completion date. Im trying to think objectively that applying at this stage doesnt help either party.

Can you advise?

2 Likes

@Deb_Knibbs Hi Deborah, is it possible to chase a response on this one please?

@Neil_Earnshaw @stevencevans @chriscorr any thoughts on the above please for James?

While what you describe - hold off on the damages - is the sort of pragmatic response that often gets implemented, its not correct in accordance with the Contract.

Under X7.1 the Contractor pays, and there is no discretion in that. So they are right to make the charge. X7.2 gives the remedy for if that changes later, which you rightly identify as being interest.

1 Like