A construction contract is executed between the owner of the project (Employer) and the contractor or supplier that is providing the requested services and contains several sections of clauses defining the scope, terms and conditions of such agreement which consists of project description, contract sum, payment basis, construction period/schedule, contract document list, construction scope, construction conditions and responsibilities, and contract law.
In construction industry, the payment basis of the contract sum is in progressive payment basis. In the construction industry the word ‘claim’ is commonly used to describe any application by the contractor for payment, which arises other than under the ordinary contract payment provisions and ‘claim’ is often seen as a dirty word in the employer section of the industry.
The general rule is that the contractor is bound to complete the work by the date for completion stated in the contract. If contractor fails to do so, contractor will be liable for liquidated damages to the employer. That is subject to the exception that the employer is not entitled to liquidated damages if by employer’s acts or omissions the employer has prevented the contractor from completing the work by the completion date.