Not merely a temporal breach — rather a legal liability that warrants compensation. Construction contracts are among the contracts most bound to time, for the contractor's obligation is not limited to completing the work, but extends to performing it within the agreed period. Thus, the time factor in this type of contract is a fundamental obligation no less important than the quality of performance itself.
First: The concept of delay in construction contracts
Delay in construction contracts means the contractor's breach of performing their obligation by the date specified in the contract — whether that date is express or inferred from the nature of the work — without a legitimate cause justifying the delay, such as force majeure or unforeseen circumstances beyond their control.
Second: The legal basis
Article 171 of the Civil Transactions Law provides: “If the debtor delays in performing their obligation, they must compensate the creditor for the harm suffered due to the delay, unless they prove that the delay in performance was due to a cause beyond their control.” Applying this to the construction contract, the contractor is a debtor obligated to perform the work within the specified time, and their delay entails their liability.
Third: The elements of contractual liability for delay
The contractor's liability for delay arises once the following elements are met:
- Non-compliance with the contract: failing to observe the agreed period without a legal justification.
- Harm: any actual loss or lost benefit inflicted on the project owner.
- Causation: the harm being a direct result of the contractor's delay.
Proving liability does not require proving the contractor's bad faith; mere breach of the time obligation suffices.
Fourth: Forms of harm resulting from the delay
- The owner losing the opportunity to operate or invest due to the project not being ready on time.
- Loss of expected rental returns.
- Bearing additional costs such as financing, security, or maintenance fees.
- Impact on the owner's contractual obligations toward third parties (tenants, partners, or financiers).
Fifth: The penalty clause
Construction contracts often include a penalty clause specifying the amount of compensation for delay. In this case, the penalty is due upon the mere occurrence of the delay without need to prove harm, unless the contractor proves otherwise.
Conclusion
Delay in construction contracts is not a mere formal breach of time; it is a contractual fault entailing the contractor's obligation to compensate the project owner for the harm suffered. Hence the importance of precisely defining contractual periods and stipulating the penalties for their breach, to protect rights and achieve balance in construction contracts.