Real Estate Tip of the Week: Pitching Liquidated Damages at the Right Level
When entering into contracts with contractors, you need to consider the potential financial implications if the contractor fails to complete the works on time…
Published 18 March 2019
But are they entitled to this because of Brexit?
It is not possible to give a “one size fits all” answer as contract terms vary and (given the on-going political machinations) none of us can foresee exactly what might happen between now and Brexit date. However under many contracts it is likely to be difficult for the contractor to claim an extension of time if the works are delayed simply by the occurrence of Brexit.
Possible grounds a contractor might use to seek an extension of time or avoid liquidated damages are:
Termination of the Contract through “Frustration” – This would require the contract to become impossible to fulfil or change the contractor’s obligations to be radically different from those at the date of the contract. Brexit may cause delay to the performance of the contract (or increase the cost of doing so) but it is very unlikely to make performance impossible or significantly different. It is interesting to note that the Court recently refused a claim that a lease had been frustrated by the Brexit process.