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The purpose of this paper is to examine the relationship between extensions of time and payment of liquidated damages under construction contracts in English law.

This paper sets out the law relating to granting extensions of time and liquidated damages and examines the effect of one upon the other. The JCT form of contract is used as an example, although it is submitted that the position is the same under other forms of contract. Case law is examined to illuminate the judicial approach and highlight inconsistencies, and consideration is given to the position in other jurisdictions.

This paper examines the effect of delaying events in particular circumstances, including where time is “at large”, sectional completion, partial possession, set‐off of liquidated damages and liquidated damages after termination of the contract. Particular attention is paid to concurrent and sequential delays; where both parties are at fault, it may be appropriate to deny the employer any entitlement to liquidated damages and deny the contractor any entitlement to loss and expense.

An understanding of the effect that delaying events have upon the contractor's right to an extension of time and the employer's entitlement to liquidated damages is critical for successful project completion. This relationship is not always straightforward and judicial approach is not always consistent. Clarification is required as to the effect of sequential delays.

This paper is of value to researchers and practitioners in establishing the legal position in an area that is often complex and obscure.

This paper aims to develop a credit-risk model in which firms face rollover risk, and the markets for defaulted assets are segmented due to entry costs. The paper shows that reducing the entry costs in this economy may decrease the total surplus of the economy. This outcome can arise because when market barriers are lifted, the gap between the liquidation prices across the markets will shrink, but then the market that would experience a price drop may face more bankruptcies because the rollover risk will increase in that market. The paper describes under which condition such an intervention policy improves or hurts the total surplus.

In Australia, compulsory rapid adjudication under the Building and Construction Industry Security of Payment Act 1999 (NSW) (or the equivalent legislation another Australian State or Territory) is a common way that payment claims under commercial construction contracts are decided. Construction contracts often contain penalty clauses. In particular, time bar clauses have been used to impose a penalty upon claimants and are frequently raised by a respondent as a reason for withholding payment. In the recent case of Andrews v. Australia and New Zealand Banking Group [2012] HCA 30 (“the Andrews case”), decided by the high court of Australia, the court has described how Australian courts must deal with penal provisions in contracts. The purpose of this paper is to consider the effectiveness of time bar clauses in the light of the penalty doctrine enunciated in the Andrews case.

A “black‐letter” approach is adopted to analyse and explain the effectiveness of time bar clauses in the light of the penalty doctrine enunciated in the Andrews case.

In the Andrews case, the high court decided that a penalty may arise where there is a stipulation in a contract in favour of a second party and upon the failure of that stipulation (the primary stipulation) there is a secondary stipulation that imposes on the first party an additional detriment to the benefit of the second party. If the second party can be compensated for the failure of the primary stipulation then to the extent that the additional detriment imposed on the first party exceeds that compensation, it is a penalty. In the context of time bar clauses, if a construction contract provides that when one party (the first party) fails, within a time prescribed by the contract, to give the other party (the second party) notice of a claim for extra remuneration or an extension of time, the consequence is that the first party forfeits an entitlement to be paid money that the party would otherwise be entitled to claim, or the first party becomes liable to pay the second party money, the penalty doctrine might apply.

The penalty doctrine is applicable to all contracts. The analysis of the Andrews case presented in this paper may be of interest in international jurisdictions, particularly where statutory adjudication for the construction industry has been introduced or is being contemplated.

The paper aims to examine the judicial approach to some aspects of contract damages in England and Wales, Australia and New Zealand.

The paper is an analysis of judgments of the three jurisdictions and academic commentary.

Generally, there is uniformity in the assessment of damages in the jurisdictions discussed as is illustrated with liquidated damages and the adherence to the judgment of the House of Lords. However, the same adherence is not evident in the case of lower court judgments in the controversial area of “consequential loss”. Although not a remedy, it is an integral part of the assessment of damages process when included in exception clauses.

The research highlights the need for knowledge of the legal issues to ensure that the contract covers what is intended so that a party is not without a remedy when the contract fails.

The normal way of dealing with damages for delay in a construction contract is to use a Liquidated and Ascertained Damages clause. Such clauses specify a preset sum to be due to the client for every day, week or month by which the contractor fails to meet the works completion date. However, the greater part of the value of construction work is actually carried out by subcontractors, and there is little or no published evidence as to how their contractual responsibilities for delays are determined and pursued. Theoretically, there are a number of possibilities (none of which is entirely satisfactory to both parties) and the logic and implications of each is discussed. A survey was conducted to discover the methods that are actually used, their incidence, and whether it was possible to relate the different approaches to the attributes of particular subcontractors or to specific situations. The most commonly encountered approach was for subcontract damages to be based upon a proportion of those set under the main contract. Interestingly, this is neither the approach incorporated within industry‐standard subcontract conditions, nor is it the one preferred by subcontractors. Furthermore, this method places considerable risks on the main contractor due to the possibilities of under‐recovery and the creation of secondary risks. This method, indeed all the methods that were encountered, seems to be the result of a rather uneasy compromise between the parties, the outcome of which may be related to their relative bargaining power.

The enforcement of liquidated and ascertained damages (LADs) can be problematic when the amounts are poorly assessed and there are lapses in the administration of contracts. This paper seeks to investigate the relevance of LAD clauses in construction contracts in Ghana, as well as the methods employed in their assessment and enforcement.

A parallel survey method was adopted. Three sets of similar questionnaires (slightly modified) were administered to professionals in client, consultant and contractor organisations in contract administration roles, to explore their experiences in the assessment and enforcement of LADs.

LADs are not serving their purpose in construction contracts in Ghana. Clients have created situations that render LADs unenforceable. LAD amounts are also not genuine pre‐estimates of expected loss to be incurred, as assumptions and guesses rather than genuine calculations on a case‐by‐case basis are adopted in their assessment.

This research indicates that the enforcement of LADs can be enhanced if clients become more diligent in their contractual, mostly financial, obligations. Since a purposive sampling procedure was adopted, the findings and conclusions of this research are only tentative, but nevertheless raise serious issues regarding contract administration practices in Ghana.

Public agencies contract out to pursue a variety of goals. But, these goals cannot be realized if the performance of contractors is not assessed and monitored. This study examines the state of performance measurement and contract monitoring in the U.S. transit agencies. We focus on three research questions: (1) What monitoring capacity exists within transit agencies? (2) What monitoring methods are used by transit agencies? (3) What performance measures are tracked by transit agencies? We find monitoring units are common in a third of agencies in the study. Service and customer complaints are the most common performance measures, while penalties and liquidated damages are the most frequent form of penalties. Finally, we find that transit agencies utilize a variety of output and outcome measures to monitor contractors.

This study aims to investigate how contract design influences supplier performance. This study synthesises three theoretical views (efficiency, relational, contingency) and provides empirical support on how effective contract design improves supplier performance.

This study reviewed contract design literature and uncovered 18 factors that may impact supplier performance. Multi-criteria, decision-making analysis examined the impact of contract factors on three supplier groups: average-, over- and under-performers. Procurement experts working with a large multinational company dealing with hundreds of procuring contracts, yearly, provided their judgement on the impact of these factors on supplier performance. Semi-structured interviews with experts and other evidence were used for data and method triangulation.

Results show that contracting with under- and over- performers presents significant differences: in the case of over-performers, contracts have a dual, yet discrete, efficiency and relational role: at transaction level, they emphasise formality, protect from opportunism and include both liquidated damages and legal action clauses. At relational level, they focus on relational learning and incentivising suppliers. However, in the case of under-performers, contracts appear to focus on contingency factors, which can be a source of ambiguity, particularly in complex environments, and trust, which has a negative impact on supplier performance.

Improving contract design can help reduce partner opportunism, reduce inter-firm conflicts and avoid disputes that can bear a social cost. This study demonstrates that companies can use advanced analytical tools to reflect upon their own decision-making process of contact design in making transparent supplier performance assessments.

To the author’s knowledge, this is the first study using decision-making techniques to enhance supplier performance by improving the contract design process.

The purpose of this paper is to determine whether the original and the revised versions of the existing prediction models are the best tools for assessing the going concern assumption of a firm in the creditor-oriented regime.

The analysis begins from estimating the classification accuracy of the original versions of the bankruptcy, going concern and liquidation prediction models. At the second step, the revised versions of the aforesaid existing prediction models are developed. At the third step, the accounting-based going concern prediction model is proposed by using multiple discriminant analysis for the creditor-oriented regime. The sample contains the financial ratios of manufacturing firms for the period 1997–2014.

The finding indicates that the five discriminatory variables, which belong to “income statement” and “statement of financial position,” of the proposed model are not only useful for evaluating the going concern assumption of a firm, but also give aid for evaluating the financial fraud risk of a firm as compared to the original and revised versions of the prediction models that are developed for the debtor-oriented regime.

The external validity of the proposed prediction model can be tested on the large data sets of the countries where the liquidation provisions are a part of their local corporate law.

The proposed accounting prediction model will be helpful for the internal and external auditors in order to determine the going concern assumption at planning, performing and evaluation stages.

The proposed accounting-based going concern prediction model is based on liquidated firms.

The aim of this paper is to explore the hypothesis that a contractor is entitled to payment for “constructive” acceleration implemented to avoid liquidated damages when denied a warranted time extension request by the employer or certifier under an English law construction contract. This claim is recognised in the US legal system, but not elsewhere.

This paper adopts a “black letter” approach to reviewing the claim of constructive acceleration within the context of English and Commonwealth case law, from the perspective of a claimant contractor.

The research presented in this paper concludes that whilst claims for constructive acceleration are unlikely to succeed in an English court on the basis of US law, a claim might be supportable on more orthodox common law grounds. These include implied instructions under the contract, breach of the contract based on the employer or certifier’s failure to operate the contract, mitigation of damages, unjust enrichment and tortious intimidation.

The focus of this paper is placed on English, Unites States, Canadian and Australasian case law.

The range of potential legal grounds for constructive acceleration examined in this paper provides a toolkit for practitioners preparing to make or defend constructive acceleration claims. This paper also bring more clarity to a potential legal problem faced by practitioners in circumstances of significant tension and limited time.

This paper provides a useful information source for practitioners faced with the prospect of advancing or defending constructive acceleration claims, and it provides a foundation for future related studies examining a wider scope of jurisdictions.