KEY GENERAL CLAUSES IN EPC CONTRACTS
Delay and Extensions of Time
The Prevention Principle
As noted previously, one of the advantages of an EPC Contract is
that it provides the project company with a fixed completion date.
If the contractor fails to complete the works by the required date
they are liable for DLDs. However, in some circumstances the
contractor is entitled to an extension of the date for completion.
Failure to grant an extension for a project company caused delay
can void the liquidated damages regime and 'set time at
large'. This means the contractor is only obliged to complete
the works within a reasonable time.
This is the situation under common law governed contracts due to
the prevention principle. The prevention principle was developed by
the courts to prevent employers i.e.: project companies from
delaying contractors and then claiming DLDs.
