Is There A Penalty When A Contractor Does Not Finish On Time?

Whether or not there is a penalty for a contractor failing to finish on time depends on what the contract says about the completion date and what happens if construction is not completed by that date. Because the contracts are so very different in residential and commercial construction, I will address each separately.

Penalties for Missing Completion Dates in Commercial Construction

In Commercial construction, it is common to have a specific completion date and a penalty for failure to complete the construction by that date. Normally the penalty for not completing the construction by the specified completion date is liquidated damages. Liquidated damages are a per day charge, ranging from $100 – $1,000 per day, for each day the construction goes past the specified completion date.