# Customer wants guaranteed timeline



## bdog1234 (Feb 25, 2008)

A customer has a relatively small project that I told them will take 2-3 weeks. It is indoors so there will not be any weather delays or anything like that. Customer has agreed with the terms of the contract except they want to add "project to be completed within 3 weeks of start date. After three weeks if project is not complete there will be a 10% discount, after four weeks a, 20% discount, five weeks a 30% discount and so on with an additional 10% discount for each additional week the project is not completed" 

Have you ever seen anything like this? The customer seems very easy going on everything else they are just really concerned with the timeline. I think the project is a maybe a solid 8 days of work so I think 3 weeks gives me plenty of time to get it done.


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## 480sparky (Feb 1, 2009)

Time for the price to go up.


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## bdog1234 (Feb 25, 2008)

They did not try to get my original price down at all nor did they try to rush my timeline I gave them. If I would have know this before hand I would have added 10% to start to give me a cushion. I don't feel good about raising the price on them now.


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## Doctor Handyman (Mar 13, 2012)

I would agree to it and also add that the customer would have to pay a 10% bonus if you finish in 2 weeks.

I have heard of these terms but more often when it is a large public works project. For example the Mullholland bridge demo over the 405 fwy in S. Calif. The demo crew would be fined $6,000/10min over completion time since the freeway needed to be reopened. It was referred to as carmagedden weekend.


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## summithomeinc (Jan 3, 2011)

When I used to paint hotels there was a 500.00/day penalty for not haveing the rooms ready for occupancy. I agree with the above. If there is a penalty for being late there should be a bonus for early completion. Should be an easy sale. Fair is fair, right?


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## Chasing Dreams (Oct 12, 2009)

Make sure you also notate that any changes to the scope of work can also extend the completion timeline.


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## Astrix (Feb 23, 2009)

It sounds like the HO is trying to adapt a Liquidated Damages Clause to his residential contract. As in the examples that Doctor Handyman and summithomeinc gave, this clause is often used in commercial contracts.

The purpose, however, is not to simply penalize the contractor for not meeting the time deadline, but to compensate the job owner because the time delay creates financial or other significant hardship. Furthermore, such a clause is usually included where the exact dollar amount to be paid as compensation is difficult to calculate, so the two parties to the contract agree beforehand on a specific amount of money. A sample wording for a Liquidated Damages Clause would read something as follows:



> It is acknowledged that the Contractor’s failure to achieve substantial completion of the Work within the Contract Time provided by the Contract Documents will cause the Owner to incur substantial economic damages and losses of types and in amounts which are impossible to compute and ascertain with certainty as a basis for recovery by the Owner of actual damages, and that liquidated damages represent a fair, reasonable and appropriate estimate thereof. Accordingly, in lieu of actual damages for such delay, the Contractor agrees that liquidated damages may be assessed and recovered by the Owner as against Contractor and its Surety, in the event of delayed completion and without the Owner being required to present any evidence of the amount or character of actual damages sustained by reason thereof; therefore Contractor shall be liable to the Owner for payment of liquidated damages in the amount of One Thousand Dollars ($1,000) for each day that Substantial Completion is delayed beyond the Contract Time as adjusted for time extensions provided by the Contract Documents. Such liquidated damages are intended to represent estimated actual damages and are not intended as a penalty, and Contractor shall pay them to Owner without limiting Owner's right to terminate this agreement for default as provided elsewhere herein.


Generally speaking, a Liquidated Damages Clause will not be accepted and/or enforced by the courts if the penalty amount is unreasonable. The principle behind the clause is similar to insurance. In an insurance claim, you are to be put back in the same position; no more, no less. You are not to profit from the loss. Liquidated Damages Clauses are similar in that the owner is not to profit from the fact that the contractor could not finish by the contract timeline. They are only supposed to be reimbursed for any loss suffered because of the delay.

Unless the customer has a justifiable reason to claim Liquidated Damages, then the clause is instead considered to be a Penalty Clause, or also called Penal Damages Clause. Generally speaking, common law (followed in USA and Canada, except for Quebec) considers Penalty Clauses to be invalid and unenforceable.

I suggest you search on the internet for further definitions and explanations of the terms: *Liquidated Damages* and *Penal Damages* and you will probably be able to gather together enough evidence to show the homeowner that even if you would have been acceptable to their terms, they are prohibited by law.

Note: Don't confuse Penal Damages with Punitive Damages. Punitive Damages can only be awarded by the courts.


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## I Mester (Aug 21, 2011)

we've had these types of clauses on commercial jobs, but never on residential. it makes sense on commercial, when you have a business that needs to move in. and or cant operate because of delays.
but on the residential side, i dunno. i would raise the price to cover your butt!


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## Flag ship (Nov 21, 2008)

Agree to it if you are sure every thing is right on your end. Document any changes no matter how minor with a time implied. We work with them often no big deal until the give me's and changes abundant get in the way. They all forget the modes made after the fact.


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## greg24k (May 19, 2007)

They trying to get you on Time Of The Essence clause... which means any delay in the completion of work described will constitute a breach of this contract... It's different then Liquidated Damage clause, like someone mentioned. When contract includes this type of clause, you wanna ask yourself why they want that in there, because if they expect any delays or if something happens, it will leave you open to a breach of contract. You have to be careful when HO ask for such clause to be included in the contract.


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## J L (Nov 16, 2009)

Make sure you're compensated for early completion at the same percentages and timeline as would be deducted from your bill if you finish late. So if you finish one week late, they'd deduct 10%. But if you finish one week early, you add 10% to your bill. Fair is fair, right?

If this does happen, make sure you have it listed as substantial completion, not completion, and have an explanation of what substantial completion is: when they are able to use the area for its intended purpose. That may mean there's a paint touch up or a switch plate missing, but the room can still be utilized.


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## ranteso (Nov 11, 2010)

Astrix is 100% correct, I know this firsthand. 

He should be thanked multiple times for taking the time to clearly explain what he wrote.


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## Jaws (Dec 20, 2010)

ranteso said:


> Astrix is 100% correct, I know this firsthand.
> 
> He should be thanked multiple times for taking the time to clearly explain what he wrote.


Astrix is a she :laughing:

Very good post, Astrix.


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## Jaws (Dec 20, 2010)

10%??? I think not.

I have not been asked and will not do a LD clause for residential, for several reasons.

When I was doing commercial many projects had a LD clause of $750- $1,500 a day. Never had to pay one on my projects. Something to keep in mind though, these projects worth were $400,000 to $1.8 million. The penalty was no where near 10% .


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## 480sparky (Feb 1, 2009)

The only problem with writing the contract to allow for a bonus for early completion is if your work is dependent on another trade.
You could be a week ahead of schedule then have to wait for another trade to complete their portion. Either they are unable to come in early or the homeowner simply forstalls them for a week to avoid paying you extra.


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## hdavis (Feb 14, 2012)

Another great post by Astrix:thumbsup:

I don't generally recommend doing this type of contract, but it can be done. It takes detailed scheduling and adapting to situations like working a weekend to make up time instead of just letting completion skate 2 days. Takes more planning time and time to adapt to things that happen. He's asking you to take on more risk than you normally would, so you should be compensated for that as well. If you aren't comfortable being able to do it in 2 weeks, I wouldn't agree to 3 weeks.

I think the owner would possibly need to agree to let you work there 24 yours a day to meet your schedule.

On something like this, I'd work over time for the first 3 days to try to get ahead. If I'm not ahead by much, I'm in trouble right out of the chute.


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## Inner10 (Mar 12, 2009)

Sounds like you better get to work!


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## Stunt Carpenter (Dec 31, 2011)

Is the work you are doing preventing the HO from living in the house when your working?


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## bdog1234 (Feb 25, 2008)

Thanks for all the replies. No the work is not going to be prohibiting them from living there but it will be a major inconvenience for them. They never gave me a timeline I gave it to them. They told me they just want to be assured that I stick to my schedule as they had someone in the past tell them something would take a week and they only showed up a couple hours a day and it drug out for a month.


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## thom (Nov 3, 2006)

I've included similar clauses in the past. We all know that some contractors start the job then drag out the completion of it for months. The HO is stuck living in a construction zone far longer than necessary because the GC cannot schedule/plan, or because he has more important jobs in progress.

To tell the truth, if I was a customer, I would insist on it. Many GC's will drag out a 6 week job to 6 months, even a year. Without a liquidated damages clause, the HO is screwed. 

So, put in the clause as the HO has asked then complete the project per agreement, or walk away. If you ask for more money now, the customer will believe you were lying when you said 2 weeks tops.


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## Inner10 (Mar 12, 2009)

bdog1234 said:


> Thanks for all the replies. No the work is not going to be prohibiting them from living there but it will be a major inconvenience for them. They never gave me a timeline I gave it to them. They told me they just want to be assured that I stick to my schedule as they had someone in the past tell them something would take a week and they only showed up a couple hours a day and it drug out for a month.


Bingo, they got hosed with someone who gave them the old "two weeks" line then showed the flag a couple days a week because they were busy with other jobs. 

I don't blame them for asking for a little collateral to go with your "word". Just make sure they understand that any changes or additions extend your time line. :thumbsup:


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## Frank5 (Aug 12, 2012)

We built a million dollar house, that the home owner wanted a clause like this in the contract. We put it in, but added our own additions to it. Saying something like there were other factors that would allow the completion to take longer, such as weather and other subs. Things that were not in our control.


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## popagorgio (Aug 8, 2012)

All of My contracts have to have an approximate start date and an
approximate end date by law. This may only be required on residential
contracts in California but, it is normal and as others have said just
be sure to clarify about change orders. If Your time estimate is a little
iffy then by all means tell them and negotiate a little longer.


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## cwatbay (Mar 16, 2010)

Personally I see no problem with the clause in the HO's contract, and, as others have said, make sure there is a clause that covers you for "delays caused by others" and "changes to the scope of work". 

We are currently 3 weeks behind on a residential project because the pool guys are dragging their feet, and, all we have to do is about an hour's worth of work and a final inspection.


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## BrandConst (May 9, 2011)

bdog1234 said:


> A customer has a relatively small project that I told them will take 2-3 weeks. It is indoors so there will not be any weather delays or anything like that. Customer has agreed with the terms of the contract except they want to add "project to be completed within 3 weeks of start date. After three weeks if project is not complete there will be a 10% discount, after four weeks a, 20% discount, five weeks a 30% discount and so on with an additional 10% discount for each additional week the project is not completed"
> 
> Have you ever seen anything like this? The customer seems very easy going on everything else they are just really concerned with the timeline. I think the project is a maybe a solid 8 days of work so I think 3 weeks gives me plenty of time to get it done.


So what's in it for you if you finish in 2 weeks? 10% bonus?


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## Astrix (Feb 23, 2009)

greg24k said:


> They trying to get you on Time Of The Essence clause... which means any delay in the completion of work described will constitute a breach of this contract... It's different then Liquidated Damage clause, like someone mentioned. When contract includes this type of clause, you wanna ask yourself why they want that in there, because if they expect any delays or if something happens, it will leave you open to a breach of contract. You have to be careful when HO ask for such clause to be included in the contract.


I focused on Liquidated Damages as there were two previous posts which compared the HO's desired wording to clauses from commercial contracts where there were pre-agreed daily payments for delays in hotel painting and freeway construction. In re-reading the wording that the HO wants included, it appears to be a combination of both a Time of Performance clause and a Liquidated Damages clause. The 1st sentence is the "time is of the essence" section which is valid and commonly found in construction contracts. It is the 2nd sentence, however, that crosses over the line by imposing a pre-agreed cash penalty.


> "project to be completed within 3 weeks of start date. After three weeks if project is not complete there will be a 10% discount, after four weeks a, 20% discount, five weeks a 30% discount and so on with an additional 10% discount for each additional week the project is not completed"


Most Time of Performance Clauses are worded along the lines of the following:


> Time is of the essence for the completion of the work described in this contract. It is anticipated by the parties that all work described herein will be completed within three (3) weeks of the date of execution, and that any delay in the completion of the work described herein shall constitute a material breach of this contract.


There is no cash penalty if the time deadline isn't met. Instead, the clause only states that missing the time deadline constitutes breach of contract. The HO can then:

1) Cancel the contract and hire another contractor to finish the job.
2) Go to court to sue for any damages they may feel they should be compensated for. It is then up the courts, and only the courts, to decide if Punitive Damages should be imposed against the contractor. 

I am not a lawyer so am not qualified to advise what to do in this specific case. My knowledge of these types of clauses is peripheral because part of my insurance job involves review of construction contracts. 

I suppose you could say nothing and agree to the clause. The HO will have their false sense of security even though you know that if the whole deal goes south, the courts won't force the penalty on you regardless of the fact that both of you agreed to this in writing.

Alternately, if you take the time to explain the correct way to word the clause so that the HO actually has some legal protection, then perhaps the HO will afford you due respect for your professional knowledge. You could start off the explanation by saying that you understand they are asking for this to ensure that you don't leave them hanging while you take on other jobs, but that the way they want this worded is not giving them the protection they are looking for. Instead, reword the clause to the standard wording as in the example above whereby "breach of contract" is the result of untimely performance. 

Just because a certain wording may show up in numerous contracts that are out there in public use, this does not mean that they are accurately worded and acceptable to use. If the 2nd sentence in the HO's desired wording is legally invalid, then there is no point to inserting in the contract.


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## bdog1234 (Feb 25, 2008)

BrandConst said:


> So what's in it for you if you finish in 2 weeks? 10% bonus?


Whats in it for me is I get the job I guess. I am not trying to screw the people or get more for me. They simply asked how long it would take I said two weeks, and they came back with this as a sort of reassurance to them that I would keep my word. 

As to the legality of the language I am not so much concerned about that. I am not a lawyer and don't see the need for it to ever go that far. The intent of the wording is clear and if I agree to it then I agree to it and will hold up my end. I am not going to try and weasel out on a technicality. 

I mainly was just curious if any of you had seen this type of thing before. I am leaning towards agreeing to it but asking them to change from a % per week to a % per day like maybe 1.5% per day.


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## popagorgio (Aug 8, 2012)

bdog1234 said:


> Whats in it for me is I get the job I guess. I am not trying to screw the people or get more for me. They simply asked how long it would take I said two weeks, and they came back with this as a sort of reassurance to them that I would keep my word.
> 
> As to the legality of the language I am not so much concerned about that. I am not a lawyer and don't see the need for it to ever go that far. The intent of the wording is clear and if I agree to it then I agree to it and will hold up my end. I am not going to try and weasel out on a technicality.
> 
> I mainly was just curious if any of you had seen this type of thing before. I am leaning towards agreeing to it but asking them to change from a % per week to a % per day like maybe 1.5% per day.


I don't think anybody suggested weaseling out of a contract. As I told
You start and finish dates are to be included in all contracts for home improvements and as far as legalities go do as You wish. It wouldn't be
wrong to include such a clause but, it is not common to place these kinds of punishment clauses because generally the customer would be protected by a breach of contract if the contractor does not meet the deadlines. Even if the people are very "nice" I would still cover My rear end. But again You asked and You got responses so, if You feel like honoring Their request then I'm not sure what the op was about.

good luck
Jim


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## Astrix (Feb 23, 2009)

bdog1234 said:


> Whats in it for me is I get the job I guess. I am not trying to screw the people or get more for me. They simply asked how long it would take I said two weeks, and they came back with this as a sort of reassurance to them that I would keep my word.
> 
> As to the legality of the language I am not so much concerned about that. I am not a lawyer and don't see the need for it to ever go that far. The intent of the wording is clear and if I agree to it then I agree to it and will hold up my end. I am not going to try and weasel out on a technicality.
> 
> I mainly was just curious if any of you had seen this type of thing before. I am leaning towards agreeing to it but asking them to change from a % per week to a % per day like maybe 1.5% per day.


In no way did I mean to imply that you, or anyone here, would want to "weasel out on a technicality". If the way I wrote my post was somehow misinterpreted, I apologize for the miscommunication. I was just trying to share my understanding of contract law.

Of course no one runs their business with the plan or expectation that the courts will have to get involved because of a dispute. But on the one in a thousand chance that something does go wrong, then what?

I understand that most of the members on CT are builders and focused on the actual construction activities of their business (as opposed to someone like me whose focus is paperwork details). However, I am curious about the mindset behind the comment of not being interested in the legality of the situation. If that is the case, then why is so much emphasis put on having a well-worded contract in the construction industry?


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## fjn (Aug 17, 2011)

*delays*

If i'm not mistaking,courts in some states will NOT inforce the penalty clause if there is no reward for early completion.I believe i read that in a trade publication years back. Good luck.


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## bdog1234 (Feb 25, 2008)

Sorry if my response came out the wrong way. What I am saying is I am a simple person, a small business doing small jobs, and my word is my bond. I put things in writing so there is no question as to what the intent or scope of the work is. I like being really clear and detailed about everything and then there are no problems. It has worked well for me in 18 years of business I have never needed a lawyer.I am not concerned if it the language the customer wants is not legal because if I agree to it and sign it then I agree to it. My reason for the post was to see if others had encountered this and if there are other things to consider such as some people brought up any changes to the original plan extend the timeline, etc.


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## Warren (Feb 19, 2005)

bdog1234 said:


> Sorry if my response came out the wrong way. What I am saying is I am a simple person, a small business doing small jobs, and my word is my bond. I put things in writing so there is no question as to what the intent or scope of the work is. I like being really clear and detailed about everything and then there are no problems. It has worked well for me in 18 years of business I have never needed a lawyer.I am not concerned if it the language the customer wants is not legal because if I agree to it and sign it then I agree to it. My reason for the post was to see if others had encountered this and if there are other things to consider such as some people brought up any changes to the original plan extend the timeline, etc.


I had a clause like this for an addition that I GC'd a few years ago. Owner just didn't want us to start and take on too much additional work. We had another job on the same street that we were only a sub on, so she may have had some concerns about what our priorities were. I had told them it would probably take 12 weeks, but we put the clause in at 16 weeks. I think the penalty was $50/day. We finished in about 14 weeks, even after doing another 10k in additional work.


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## rselectric1 (Sep 20, 2009)

One of my GC's is dealing with this right now. They insisted on a $100 per day credit for anything past their original completion date. (Including weekends, and he was pretty stupid to agree to it IMO)

Anyhow, it sounds like your clients just want some reassurance, unlike the people we are dealing with now. Their intent (I believe) from the beginning was to get a bunch of stuff for free.

Of course there were change orders, but everything they picked tended to be unusual, and of course unavailable and required special orders. (We're talking everything from weird can light trims to under cabinet lighting fixtures, and that's just on MY end).

For example, when I gave him the model numbers (his request) of the puck lights we intended to use, he rejected them because there was no "photo metrics" available on line to ensure even lighting. Many etc.'s here.

The clients are snakes and this GC is STUCK with this clause.

Too complicated at this point to type everything out here, but I figured I'd at least share a situation where these clauses can be used against us in a malicious way.

Otherwise as (Thom?-or another vet) said above, I actually would consider asking for something like this if I was the customer too.

Good luck, and if you keep constant communication open with them and tell them any difficulties you have with unexpected lead times, or other issues I am guessing they won't hold you to it. But who knows.
People are funny like that.


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## jamestrd (Oct 26, 2008)

rselectric1 said:


> One of my GC's is dealing with this right now. They insisted on a $100 per day credit for anything past their original completion date. (Including weekends, and he was pretty stupid to agree to it IMO)
> 
> Anyhow, it sounds like your clients just want some reassurance, unlike the people we are dealing with now. Their intent (I believe) from the beginning was to get a bunch of stuff for free.
> 
> ...



change orders would actually be an amendment to the original contract..so in my opinion..would void any completion date.although original provisions may remain, materials and timelines would have to change as well..

I would also think these strange requests would have either been spelled out from the beginning, or would be completely out of the question by the supplied budget from the GC..

if something take 4 weeks to come in on a change order, obviously your "completion date" would be void....

personally i don't even think the OP's people can make this request, but I do not think it would be honored in court..

they would need to demonstrate a real hardship for not completing and even with "time is of the essence clauses "judges would need to determine the purpose of the clause and the intent of parties in creating it...to create it simply to not have to pay is not a reason for having the clause and what damages can or are being suffered as a result.


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## Metro M & L (Jun 3, 2009)

Id counter with a 10% bonus if you're early and the cap the penalty at 20% for two Weeks late. no reason for and eight day job to take five Weeks. Knock it out and move on.

Id also include a material availbilty caveat and a acess to the work site clause.


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## rselectric1 (Sep 20, 2009)

jamestrd said:


> change orders would actually be an amendment to the original contract..so in my opinion..would void any completion date.although original provisions may remain, materials and timelines would have to change as well..


James, as I said this is complicated and YES each change order from me listed an additional amount of time required. So my change orders alone bought the GC almost 2 weeks. However I found out early this week that they refused to sign the first one. Nobody told me so it's on the GC.

So far so good as we are able to circumvent most of it, but it's a bit stressful playing these games.


I'll get paid regardless, but I am doing my damnedest to make sure these snakes don't profit from this scheme.


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## VinylHanger (Jul 14, 2011)

Charge them 400 dollars a day and give them a 40 dollar a day penalty. :thumbup: :jester:


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## greg24k (May 19, 2007)

In most cases, especially in residential construction, contracts are different because they involve various stages of development, numerous sub-contractor involvement and countless variables encountered during the job and because of that, delay is often consequential, expected and outside the control of either party. 
Courts today are of the view that in order for an owner to invoke the liquidated damages clause, the owner needs to be able to show that the delay was not a nominal breach and that there were in fact actual damages resulting from the delay.

With that said if contractor feels there is a delay, he will start writing letters to the HO stating due to unforeseen situation and there will be a delay by so many days, etc... and this is one of the things which throws liquidated damage cases out the window.

Thats why such clause always been one of the difficulties to collect liquidated damages clauses in HO-contractor agreements is that the delays must be the direct responsibility of the contractor and proving the actual liquidated damages... 
Such clause used more in large commercial projects where millions of $$$ involved, real estate transactions, sales of goods, etc were actual damages can occur.

Don't agree to anything, because you saying its a small job and you not sure yourself how long it will take (2-3 weeks) it could be 4-5 if something should happen along the way, you just opening the door for legal BS.


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## Seven-Delta-FortyOne (Mar 5, 2011)

bdog1234 said:


> A customer has a relatively small project that I told them will take 2-3 weeks. It is indoors so there will not be any weather delays or anything like that. Customer has agreed with the terms of the contract except they want to add "project to be completed within 3 weeks of start date. After three weeks if project is not complete there will be a 10% discount, after four weeks a, 20% discount, five weeks a 30% discount and so on with an additional 10% discount for each additional week the project is not completed"
> 
> Have you ever seen anything like this? The customer seems very easy going on everything else they are just really concerned with the timeline. I think the project is a maybe a solid 8 days of work so I think 3 weeks gives me plenty of time to get it done.


I hope you didn't structure your bid with 30% (or more) unpayed at the end of the job.


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## Spike7 (May 18, 2012)

sorry , i think its a totally wrong thing to agree to 
its like their trying to find a way to screw him , and alot of people here are discribing the item their going to screw him with .
analize all you want 
screwed is screwed is screwed
intentionally , un-intentionally 
doesn`t matter
i would agree to a term where i i promise to be there every day till its done 
i would agree that i would not take on any projects while this one was going on.
thats it
i understand people worry about a job dragging on .

that why you hire a recomended contractor.

how bout a penalty back at them if they drag the job on . what if they decide " we have the day off , and we don`t want you working onthe house today"
or 
" we haven`t decided on the color/ materials / appliances yet , can you hold of a day or two?"

if they want a definete time 
then they have to have all items sitting there , and ready .
they have to have all areas cleaned out , and ready for work
they have to make sure you can put in the hours per day to get the job done 
to many variables in residentials .
have done them for 35 years or more ( with my dad as a kid , and now with my company my whole adult life)

construction is just not an exact science . 

do you truly need the job that bad?
you`ll do a great job 
but if your late , they want to take money out of your pocket because it wasn`t done in time?

i`ve told many clients " i`d rather a year from now , you say " he took a bit longer than he said , but it was a great job," as opposed to "he finished on time , but his work was sub-par"


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