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
B) 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.
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: 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.
Option C: Immediately terminate the subcontractor
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.
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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