Background
Our client, a construction company, contracted with a local government to build a parking structure and carried out the work. Although the local government failed to hand over the site on time because of a boundary dispute and other issues, it imposed liquidated damages for delay measured against the completion date originally agreed, and withheld payment for extra work it had ordered.
What Was at Stake
The issues were who was responsible for the delay and how much should be allowed for the extra work. With a public body as the project owner, the position was a difficult one for our client.
How Changchun Helped
Acting for our client, Changchun brought a claim for the construction payment and, through appraisal proceedings covering the extra work, obtained recognition of the additional construction payment and the design service fees. We also had a substantial part of the improperly imposed delay damages struck out.
The court allowed the additional construction payment and design service fees and reduced the delay damages. The case makes clear that responsibility for a delay caused by the project owner's own circumstances cannot be shifted onto the contractor. (Outcomes depend on the facts of each case and may differ.)