On the other hand, the owner wishes to ensure that the duration of completion of the contract is not extended if the contractor has not set a realistic completion time or if the contractor has not carefully continued the construction. The duration of the extension (delay) would depend on the criticism of these materials for the completion of construction and the impact of the supply delay. It is important to determine the essential completion date. The guarantees provided for in the contractual documents usually begin on this date. In addition, the substantial completion date has financial implications. It is quite common for a contractor to receive a deduction after substantial completion, less an amount for outstanding punch tricks elements. If practical completion is not certified until the agreed completion date, the supplier may be required to pay lump sum and established damages to the procuring entity. This will be damage pre-established and determined at the time of conclusion of the contract on the basis of a calculation of the actual damage that the procuring entity is likely to suffer if the contractor does not comply with the completion date. Some contracts require that a certificate of non-performance be issued as a precondition for the deduction of lump-sum and established damages. When negotiating construction contracts, the contractor must ensure that delays are excused and that the completion period is extended for each period resulting from circumstances over which the contractor would have no influence.
Essential completion is often defined as the completion phase during which the project can be used by the owner for him. Certainly, a homeowner could use a hotel facility for him long before landscaping work takes place. But is it the time planned by the owner, who expected not only finished rooms, lobbies and amenities, but also an aesthetically complete project that would attract business? Where the parties have agreed on lump sum compensation, the relevant point for starting or stopping lump sum damages is usually substantial finalisation. (See § 3.3 of AIA document A101 – 2017 and ConsensusDocs 200 § 6.5.) Lump sum damages are a contractual amount agreed in advance by the parties as damages for the early completion of the work and, as a general rule, in the form of a fixed daily amount for each working day that lasts beyond the completion date required by the contract. . . .