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A subcontractor fails to complete work on schedule, causing project delays. Under a typical subcontract agreement, what is the general contractor's primary remedy?

Correct Answer

C) Charge liquidated damages or actual delay costs

The primary remedy for subcontractor delays is typically to charge liquidated damages (if specified in the contract) or actual delay costs. This provides compensation for the damages caused by the delay while maintaining the contractual relationship.

Answer Options
A
Immediately terminate the subcontractor
B
Withhold all payments until work is completed
C
Charge liquidated damages or actual delay costs
D
Complete the work with own forces at subcontractor's expense

Why This Is the Correct Answer

Charging liquidated damages or actual delay costs is the primary remedy because it provides monetary compensation for the harm caused by delays while preserving the contractual relationship. This approach follows the fundamental contract law principle of making the injured party whole through damages. It's typically the first remedy pursued before considering more drastic measures like termination, as it allows the project to continue while addressing the financial impact of delays.

Why the Other Options Are Wrong

Option A: Immediately terminate the subcontractor

Immediate termination is typically a last resort remedy, not the primary one. Most contracts require notice and opportunity to cure before termination, and termination can create additional complications and delays for the project.

Option B: Withhold all payments until work is completed

Withholding all payments can constitute a breach of contract by the general contractor and may violate prompt payment laws. Payments should only be withheld in proportion to incomplete or defective work, not as a blanket remedy for delays.

Option D: Complete the work with own forces at subcontractor's expense

Completing work with own forces at subcontractor's expense (called 'completion by others') is typically a secondary remedy used after other measures fail. It requires proper notice and procedures, and is more complex and risky than seeking monetary damages.

Memory Technique

Think 'DOLLARS before DRASTIC' - seek monetary damages (dollars) before taking drastic actions like termination or taking over the work

Reference Hint

Florida Building Code - Chapter 1, Section 107 (Construction Documents and Inspections) and contract law sections dealing with breach remedies and damages

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