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How often are delay claims paid when they are on paper only? for example...

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John Reeves
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For example, on a claim where a contractor is claimng they were going to complete early and now they can't...#1 the contractor is starting later than the contract allowed, #2 they are taking longer than they showed on their schedule for the preliminary work #3 The Milestone Date from another contractor to be out of the way is a "no later than" so the contractor "might" get to that area sooner than their claim start date.  Do you have to pay for "on paper" or can you wait and see how it actually plays out?

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Zoltan Palffy
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Liquidated damages do not require the claimate to prove that the loss claimed have actualy been suffered. Liquidted damage clause is used where actual damages though real are difficult or impossible to prove. Its more like therodical damages based on know factors or assumptions. 

Howver the contractor must prove how he was damagaed oin a delay situation. 

Liquidated damages are calculated priro to awarding the contract. There are 3 things to look at ot see if it is enforceable

1. Is the caluse was reasonable i.e. what assumptions were assumed when determing the dollar amount

2. How were the damages established i.e. what was the basis

3. What was the intent of both parties

I.e. if a train station does not open its not the people who are damaged but the owner of the trains. What is the anticipated amount of ridership that was expected to take that train ? There would be a loss of revenue due to no ridership there and could be extended bussing cost to locations where the train was supposed to go. These are real costs to the owwer/operator.

i.e. You are expected to open the hotel on time but the contractor was late by X number of days. There would be a loss of revenue due to the rooms that could not be rented out. 

Not sure whay you mean by what if they accelerate to get the claim who is acclerating the contractor ? He would not accelerate unless he was directed to do so. 

He cant or say, if you are not going to pay us we will just drag this out. If he is directed to accelerate then by the terms of the  contract he must accelerate and then argure about the cost of acceleration later. If he does not accelerate or come up with an acceleration plan then his contract can be terminated for convienience. The contractor will be put on notice and given 30 days to cure the problem in this case begin the acceleration. 

This will allow the owner to unilaterally terminate the contract with or without cause without breach of contract.

If this happens then the owner would go to the contractors bonding company and tell them what happend and that there was X dollars of work remaining when the contract was terminted for convienence. The bonding company would then pay the owner this amount to get another contractor to finish the remaining work. 

If breach of contract did not actually impact the project the Liquidated damages usually will not be awarded. 

John Reeves
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"Actual damages must be incurred to collect any compensation in terms of delay or on the owners side the assessment of liquidated damages for the contractor being late."  I keep hearing this - this seems odd to me - shouldn't companies have to pay damages or compensation "just because the contract sais so"?  -  what good it the contract then in this case?  There are lots of contracts they say if x happens then you pay "y" - there is no stipulation if they "really deserve it"  -  is there a ton of gray area in damages like that = a train station doesn't open = people are inconvenienced but you have to prove an amount they are inconvenienced by?  To me the biggest question would be petaining to: what if they accellerate to make sure they get the claim - or say, if you are not going to pay us we will just drag this out...?

Zoltan Palffy
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A. The contractor must prove that the schedule is 100% resonable and supported with documentation showing how he plans to complete early.

1. If the contract stipulates the project must be complete X number of dasy after Notice to Proceed then the finish date wil move accordingly

2. Why are they taking longer for the preliminary work were there delays or did they just under estimate the duratin which goes back to point #1 in proving your durations and logic with backup how were these durations derived ?

3. If they get there sooner then it may mitigate any delay listed in item #2. 

 Do you have to pay for "on paper" or can you wait and see how it actually plays out?

You will have to put it on paper THEN wait to see how it all shakes out.

Actual damages must be incurred to collect any compnesation in terms of delay or on the owners side the assessment of liquidated damages for the contractor being late.