How to claim compensation for construction delays

Construction contracts concluded between the client (client) and the contractor (contractor) usually include a schedule. This schedule specifies the interim or final dates by which the agreed services are to be completed. Although time buffers are usually factored into the planning, the contractor is not always able to meet the corresponding deadlines. They fall behind schedule.

The consequences of this depend on various factors. A key factor in this context is whether the extension of the construction period is within the contractor’s sphere of influence and responsibility. The legal provisions applicable to the construction contract are also crucial.

Legal Basis: Swiss Code of Obligations and SIA Standard

In principle, the legal relationship between the client and the contractor is governed by the provisions of the Swiss Code of Obligations (CO): Articles 363 et seq. of the Swiss Code of Obligations (CO) regulate the rights and obligations of the contracting parties. However, they do not provide any specific requirements for construction contracts. The Swiss Society of Engineers and Architects therefore created the private SIA Standard 118 on “General Terms and Conditions for Construction Work.”

The SIA Standard forms a differentiated, practically proven basis for every construction contract. However, it only applies if its applicability was expressly agreed upon between the parties when concluding the contract. Deviating provisions in the specific contract are possible within the framework of contractual freedom, but result in the SIA Standard losing its validity. The individual provisions are subject to a hierarchy:

• Mandatory provisions of private law
• Individual agreements between the parties
• SIA standards or other agreed terms and conditions
• Amendable provisions of private law

Importance of the Legal Basis for Delay

If the construction company is unable to meet the contractually agreed deadlines, it will be in default if the law on construction contracts for work and services applies, in accordance with Articles 102 et seq. of the Swiss Code of Obligations. The situation may be different if SIA Standard 118 applies and there are no deviating agreements in the contract. In this case, the contractor may, under certain circumstances, assert a claim for an extension of time. Several conditions must be met for this to happen:

• The contractor is not responsible for exceeding the execution deadline.
• The contractor immediately informs the client of the delay and its cause.
• The contractor offers all reasonable measures necessary to meet the contractually agreed deadlines (acceleration measures, Article 95, Paragraph 2 of SIA Standard 118).
• In direct comparison, the delay provisions of SIA Standard 118 are therefore more advantageous for the construction company. If the right to a reasonable extension of time is affirmed, the consequences of delay do not arise.

Construction contracts concluded between the client (client) and the contractor (contractor) usually include a schedule. This schedule specifies the interim or final dates by which the agreed services are to be completed. Although time buffers are usually factored into the planning, the contractor is not always able to meet the corresponding deadlines. They fall behind schedule.

The consequences of this depend on various factors. A key factor in this context is whether the extension of the construction period is within the contractor’s sphere of influence and responsibility. The legal provisions applicable to the construction contract are also crucial.

If the construction company cannot complete your house or apartment within the agreed deadline, you have various rights. A construction law attorney will clarify what these rights apply in your individual case. They will be available to answer all your legal questions, show you the best course of action, and find the right solution even in complex situations.

In principle, regardless of whether the contractor is responsible for the delay, you can set a grace period for contract performance (Art. 107 para. 1 of the Swiss Code of Obligations), declare your withdrawal (Art. 109 para. 1 of the Swiss Code of Obligations), or terminate the work contract (Art. 377 of the Swiss Code of Obligations). If SIA Standard 118 is part of the contract, the contractor also owes you any agreed contractual penalty (Art. 98).

If fault can be proven, the contractor is liable for both damages caused by the delay and for accidental damages (Art. 103 para. 1 of the Swiss Code of Obligations). If the reason for the extension of the construction period lies within your sphere of influence and responsibility, the situation is reversed: the building contractor can now assert a claim for an extension of the construction period or a claim for damages.

How does a claim for damages arise in the event of construction delay?

A delay in construction does not automatically give rise to a claim for damages. In order to assert such rights, the contractor, as the debtor, must actually be in default. In addition to the failure to perform, three conditions are required:

• the due date of the performance claim
• a reminder from the injured party
• the developer is responsible for the delay

Therefore, there is no default if the contractor is not responsible for the construction delay. In these cases, the consequences of default described do not apply. If you, as the client, are entitled to damages, the contractor is obligated to compensate you for all financial losses incurred as a result of the delay.

Due Date: When must the agreed service be completed?

The due date of a claim gives you the right to demand fulfillment from the debtor. The date by which the service must be provided depends on the individual deadline agreed upon. The construction contract usually contains a corresponding clause. Often, a specific date is specified for completion. However, a so-called determinable date can also be agreed upon.

The determinable date is not based on a fixed date. It requires the service to be provided within a clearly defined period of time and is often linked to the occurrence of an event. This is the case, for example, if the parties agree to the completion of the construction project within eight months of the granting of the building permit. In this case, the due date is clearly defined even without a fixed date.

If you haven’t agreed on a contractual deadline with the contractor, it’s difficult to determine when the due date is due. Generally, the building contractor is obligated to begin construction promptly and complete the work within a reasonable timeframe. In practice, however, the parties often have very different views on what this means. Disputes are inevitable.

A professional construction law attorney will help you clear up any ambiguities. They will review the contractual agreements, assess the adequacy of completion, and support you in your arguments in legal disputes. A construction law attorney is also a competent contact for building contractors seeking legal advice.

If a claim is due, you can demand that the contractor complete the construction work. When you do this is essentially up to you. However, the consequences of late performance only become relevant under private law once the creditor has placed the debtor in default by issuing a reminder. This follows from Art. 102 Para. 1 of the Swiss Code of Obligations (OR).

What is a reminder?

A reminder is a request from the creditor addressed to the debtor to provide the agreed service. If worded clearly and unambiguously, it places the contractor in default of the due date (Art. 102 Para. 1 OR). The effectiveness of the reminder is subject to the principle of access. Exceptions to this are cases in which the debtor requires a reasonable amount of time to prepare.

When is a reminder unnecessary?

A reminder is not always mandatory. If you have agreed on a completion date with the construction company, it is automatically in default after this deadline has expired (Art. 102 para. 2 of the Swiss Code of Obligations). This exception applies to both specific deadlines and roughly defined dates. The only important thing is that the service is due by a clearly definable date.

A reminder is also unnecessary if the contractor refuses to perform on its own initiative. No direct declaration is required: It is sufficient for the contractor to express its will through its actions. It is considered that the contractor is in default without any further action (Art. 108 para. 1 of the Swiss Code of Obligations). A construction law attorney can clarify whether and which formalities must be observed in your case.

Fault: When is the construction company responsible?

The contractor is only in default if the delayed completion of the construction project is within its sphere of influence and responsibility. This means that the contractor must have been at least slightly negligent in exceeding the agreed deadline. The law generally assumes the contractor’s fault.

If the contractor wishes to claim that he is not responsible for the delay in construction, he must provide the relevant evidence. He bears the burden of explanation and proof.

Delays by the Client

In practice, delays in the construction process are often attributable to the client or their architect. This is the case, for example, when additional services are commissioned or originally agreed services are to be performed in a different version. If the implementation of these requests takes more time than the unchanged construction, the delivery date will be postponed accordingly without further consultation.

The law governing construction contracts provides for cooperation activities that involve clients in the preparation and execution of the construction project. If you breach your obligations, you are in default of acceptance (Art. 91 of the Swiss Code of Obligations). The contractor cannot be held responsible for any resulting delays. The same applies in the event of insolvency, according to Art. 83 para. 1 of the Swiss Code of Obligations. Deadlines may be postponed without incurring the consequences of default.

Delays caused by third parties

If a contractor uses any auxiliary personnel, they must always accept responsibility for their negligence. This applies to both their own employees and subcontractors. However, the contractor is not liable for the delayed provision of construction materials or errors made by their suppliers – unless they are due to their own errors. This is the case, for example, with incorrect or insufficient orders.

Delays caused by external causes

External causes that can lead to an extension of the construction period can sometimes be calculated even before the contract is concluded. In this context, not only the prevailing construction site situation at the respective location plays a role, but also typical climatic and weather conditions. Factors of this kind can hinder the construction process and must be taken into account by the contractor. Failure to do so constitutes negligence and culpability.

If the delay arises for reasons that were not foreseeable at the time the contract was concluded, the extension of the construction period is justified. This applies, for example, to the late granting of the building permit. Even after construction has begun, unforeseeable disruptions can occur that could result in the completion deadline being exceeded. This could include a significant deviation of the actual soil conditions from expectations.

If all the conditions for debtor default are met, you can assert a claim for damages against the contractor for delayed performance (Art. 103 para. 1 of the Swiss Code of Obligations). In financial terms, you must be placed in the same position as you would have been if the service had been provided on time. However, there must be a demonstrable connection between the cited financial disadvantages and the delay.

The claim for damages usually also includes other expenses caused by the delay. Examples include lost profits due to lost rental income, the cost of renting alternative accommodation, or interest expenses for the extended use of a loan. The contractor is also generally obligated to reimburse the legal fees incurred in pursuing legal action.

Overall, a construction delay often means significant additional financial expense for the client. It represents an enormous burden in many respects. GetYourLawyer helps you find an experienced construction law attorney who will represent your interests with assertiveness and empathy. Submit a non-binding inquiry using the form on the page.