Delays in Construction Contracts in Qld – Complete Guide

Delays in Construction Contracts in Queensland

Delays in construction contracts can have significant legal, financial, and practical consequences for both homeowners and builders in Queensland.

Whether delays arise from unforeseen site conditions, supply chain issues, weather events, or contractual disputes, understanding the legal implications is essential to managing risks, protecting rights, and ensuring compliance with relevant laws, including the QBCC Act.

Delays in Construction Contracts – For Homeowners

Homeowners enter construction contracts expecting their projects to be delivered on time and within budget. When delays occur, they can lead to:

1. Increased financial burden – Extended construction periods can result in additional rental costs, loan repayments, or temporary accommodation expenses.
2. Contractual disputes – If a builder fails to complete the project by the agreed date, homeowners may have the right to claim liquidated damages, provided these are specified in the contract.
3. Uncertainty and inconvenience – Delays may impact move-in dates, disrupt personal plans, or affect property value.
4. Legal risks – If disputes arise over delay claims or extensions of time (EOTs), homeowners may need to engage in mediation, QCAT proceedings, or legal action.

Understanding what constitutes a legitimate delay, when extensions of time can be granted, and how compensation for delays works is crucial for homeowners to safeguard their interests and ensure fair outcomes.

Delay in Construction Contracts – For Builders

Builders face their own legal risks when delays occur, including:

1. Potential liability for damages – If a delay is deemed non-excusable, builders may be required to pay liquidated damages as set out in the contract.
2. Cash flow and financial strain – Extended project timelines can increase labour, equipment hire, and overhead costs, potentially affecting profitability.
3. Reputational damage – Frequent or poorly managed delays can harm a builder’s reputation and future business opportunities.
4. Legal disputes – Builders must ensure they comply with contractual obligations, including proper notification and documentation of delays. Failure to follow correct procedures may result in denied EOT claims and potential litigation or default judgment.

Builders should proactively manage delays by keeping detailed records, ensuring clear communication with homeowners, and understanding their rights under Queensland’s construction contract laws.

Common Causes of Delay in Construction

When discussing damages for delays in a building and construction contract, you may be wondering what may have caused the delay in the first place.

There are several reasons that there may be a delay in a construction project.

Delay Caused by Budget

Budget mishaps in construction contracts are another common reason for a delay. Building contracts often require significant estimation regarding the time and money it will take to complete the project.

When estimates are incorrect, the job can be significantly affected and sometimes even terminated. When a budget issue arises in a contract, a significant delay can occur.

Delay Caused by Approvals

It can be difficult to obtain approvals for the several aspects of building projects that need to be approved by various bodies. When there are issues or delays with obtaining approvals, a delay in the completion of the project will likely arise.

Delay Caused by Design Changes and Errors

Variations requested by homeowners, including modifications to building layouts, materials, or finishes, can extend project timelines, especially if additional approvals are required.

Architectural and engineering errors may also necessitate rework, creating further delays and potential cost increases for builders and homeowners.

Delay Caused by Financial Constraints

A lack of funding or delayed payments can severely impact the smooth progression of a construction project. Builders rely on timely cash flow to procure materials, pay subcontractors, and cover ongoing operational expenses.

Work may slow or stop altogether if a homeowner or developer experiences financial difficulties, leading to contractual disputes and potential breaches or repudiation of the contract.

Delay Caused by Unforeseen Site Conditions

Unforeseen site conditions, such as unexpected underground utilities or poor soil quality, can significantly disrupt construction timelines.

Hidden obstacles, such as rock formations or groundwater, may necessitate additional excavation, engineering adjustments, or new approvals, leading to project delays and increased costs.

Delay Caused by Extreme Weather

Queensland’s unpredictable climate, including cyclones, flooding, and heavy rainfall, can halt construction activities due to safety risks and site inaccessibility.

Weather-related delays may qualify for extensions of time (EOTs) if they meet contractual requirements, such as being unforeseeable and beyond the builder’s control.

Delay Caused by Supply Chain Disruptions

Global and local economic factors, such as manufacturing shortages, transport delays, and skilled labour shortages, have led to significant disruptions in Queensland’s construction industry.

Builders facing material unavailability or subcontractor shortages may be entitled to an EOT, provided they can demonstrate that the delays were beyond their reasonable control.

Delays Caused by Homeowners or Third Parties

Homeowners and third parties can inadvertently delay projects by failing to provide necessary approvals, delaying progress payments, or supplying materials late.

Delays in council approvals, financing approvals from banks, or owner-supplied materials can cause project standstills, often placing builders in a difficult position regarding contractual deadlines and completion schedules.

How Delays Impact Project Costs, and Contractual Obligations

Delays disrupt the planned schedule of works, leading to extended construction periods. The impact depends on whether the delay is excusable or non-excusable.

Excusable delays (e.g., bad weather, supply chain disruptions, council approval delays) may entitle builders to an extension of time (EOT) without penalty.

Non-excusable delays (e.g., builder mismanagement, lack of subcontractor coordination) can result in liquidated damages or other penalties.

Unforeseen delays can lead to a domino effect, affecting subcontractor availability, financing deadlines, and overall project delivery.

Financial Costs

Construction industry delays often lead to increased costs for all parties:

1. For homeowners – Delays can mean extended rental or mortgage payments, additional storage costs, and even legal expenses if disputes arise.
2. For builders – Prolonged projects lead to increased labour costs, subcontractor rebooking fees, material price increases, and potential liquidated damages claims from homeowners.

In some cases, the builder may be able to pass on increased costs to homeowners through contract variations or delay claims, particularly if the delay is due to factors beyond their control (e.g., material shortages).

Contractual Obligations

Construction contracts in Queensland, including QBCC, HIA, and Master Builders contracts, set out strict rules for managing delays. Key contractual obligations include:

1. Builders must notify homeowners of delays as soon as they become aware of them.
2. Extensions of time (EOT) must be properly documented and submitted within the contractual timeframe.
3. Liquidated damages may apply if the project is not completed on time and an EOT is not granted.
4. Homeowners may have the right to terminate the contract if delays exceed an unreasonable period, depending on the terms of the agreement.

Failure to adhere to these obligations can result in disputes, financial penalties, and potential legal action.

Extensions of Time (EOT) Provisions

An extension of time (EOT) allows a builder to legally extend the project’s completion date without breaching the contract. However, not all delays qualify for an EOT, and builders must follow specific procedures to successfully claim an extension.  To be valid, an EOT claim must:

1. Be caused by a delay that is beyond the builder’s control (e.g., severe weather, material shortages, council approval delays).
2. Fall under a recognised delay category in the contract (not all contracts cover the same types of delays).
3. Be unforeseeable at the time the contract was signed (if a supply issue was widely known before contract execution, it may not qualify).
4. Comply with contract notification and documentation requirements.

Section 42 of Schedule 1B of the QBCC Act, says:

42 Extension of time

(1) The building contractor under a regulated contract may only claim for an extension of time under the contract if—
(a) the delay causing the need for the extension of time was—
(i) not reasonably foreseeable and beyond the reasonable control of the contractor; or
(ii) caused by the building owner; or
(iii) caused by a variation of the contract complying with schedule section 40; and
(b) the claim is made to the building owner in writing; and
(c) the claim is given to the building owner within 10 business days of the building contractor becoming aware of the cause and extent of the delay or when the building contractor reasonably ought to have become aware of the cause and extent of the delay; and
(d) the owner approves the claim in writing.
(2) A building contractor under a regulated contract must not seek to rely on an extension of time under the contract unless the contractor claimed for the extension of time in compliance with subsection (1).
(3) A building contractor under a regulated contract must give the building owner a signed copy of a claim for an extension of time within 5 business days of the owner approving the claim.
(4) A regulation may prescribe when a series of similar delays may be taken to be a single delay for the purpose of subsection (1) (c).

Common Mistakes That Lead to Rejected EOT Claims

Submitting an Extension of Time (EOT) claim is a formal process that requires strict compliance with contractual and legal requirements.

Builders who fail to follow the correct procedures risk having their claims rejected, which can result in liquidated damages, contractual disputes, and financial losses.

To avoid unnecessary complications, builders must ensure that EOT requests are properly documented, justified, and submitted on time.

Below are some of the most common mistakes that lead to rejected EOT claims:

1. Failing to notify the homeowner within the contractually required timeframe.
2. Not providing adequate supporting documentation (verbal explanations are insufficient).
3. Attempting to claim an EOT for a foreseeable delay (e.g., known supply chain disruptions).
4. Not demonstrating that reasonable efforts were made to mitigate the delay (e.g., failing to seek alternative materials or suppliers).

Regulatory Framework Governing Construction Delays in Queensland

In Queensland, construction contracts and delay-related disputes are regulated under several key pieces of legislation and legal bodies.

The QBCC Act provides the statutory framework for residential construction contracts, while the Queensland Civil and Administrative Tribunal (QCAT) plays a central role in dispute resolution.

Understanding these regulatory mechanisms is crucial for homeowners and builders to ensure compliance and manage construction industry delays effectively.

Queensland Building and Construction Commission Act 1991 (QBCC Act)

The QBCC Act is the primary legislation governing construction contracts, licensing, dispute resolution, and consumer protection in Queensland’s building industry.

Administered by the Queensland Building and Construction Commission (QBCC), the Act sets out legal obligations for builders and homeowners, ensuring fair and lawful construction industry practices.

The Act outlines when and how builders can claim EOTs, particularly in unforeseen delays such as bad weather, material shortages, or council approval delays.

Builders must provide timely written notice to homeowners or risk being liable for liquidated damages.

The Act allows for liquidated damages clauses, enabling homeowners to claim compensation if builders fail to complete work within the contractual timeframe. However, due to justifiable delays, builders can avoid penalties if they successfully claim an EOT.

The QBCC Act provides mechanisms for handling disputes over delays, payments, and contract breaches. If disputes arise, the QBCC can mediate between parties, issue binding decisions, or refer cases to QCAT for further legal action.

Queensland Civil and Administrative Tribunal (QCAT)

The Queensland Civil and Administrative Tribunal (QCAT) provides a cost-effective, accessible, and legally binding mechanism for resolving construction-related disputes involving delays, contract breaches, and financial claims.

QCAT hears disputes between homeowners, builders, and subcontractors for residential building work. It can handle claims related to:

1. Extensions of time disputes.
2. Liquidated damages claim.
3. Failure to complete work within contractually agreed timeframes.

Homeowners can lodge complaints if a builder has failed to meet agreed deadlines without a valid EOT.  Builders can use QCAT to challenge liquidated damages claims or dispute homeowner refusals to approve EOT requests.  QCAT has the power to:

1. Order builders to pay compensation for delays.
2. Enforce or reject EOT claims based on contractual and legal compliance.
3. Terminate contracts if delays have rendered them unworkable.

The process for lodging a dispute generally involves:

1. Attempting to resolve the issue through direct negotiation.
2. Filing a complaint with the QBCC, which may intervene or mediate.
3. Escalating the matter to QCAT if a resolution is not reached.

QCAT provides a fair and efficient legal forum for resolving delay-related disputes, ensuring that both homeowners and builders are protected under Queensland law.

QBCC’s Role in Managing and Resolving Delay-Related Disputes

The Queensland Building and Construction Commission (QBCC) plays a crucial role in overseeing construction industry compliance, licensing, and dispute resolution. It acts as the first point of contact for resolving delays, contract breaches, and defective work disputes before matters escalate to QCAT or court litigation.

The QBCC ensures that construction contracts comply with state laws, including requirements for:

1. Fixed project timelines.
2. Proper extension of time procedures.
3. Fair and lawful contract terms.

When a dispute arises, the QBCC can facilitate negotiations between builders and homeowners to reach a fair settlement. Mediation may result in:

1. An agreed-upon extension of time.
2. Partial compensation for delays.
3. A revised contract with adjusted terms.
4. Disciplinary Action Against Builders.

If a builder repeatedly fails to meet deadlines or comply with contract obligations, the QBCC may:

1. Issue fines and penalties.
2. Suspend or revoke the builder’s licence.
3. Blacklist non-compliant builders from obtaining future work.

If a dispute cannot be resolved through QBCC mediation, the matter may be referred to QCAT for a formal ruling. In severe cases, disputes may escalate to the Queensland Supreme Court or District Court.

By ensuring compliance, mediating disputes, and enforcing construction industry regulations, the QBCC plays a critical role in protecting both builders and homeowners from unfair contract delays.

Construction delays in Queensland are closely regulated under the QBCC Act and QCAT dispute resolution framework. Homeowners and builders must understand their contractual rights and legal obligations to avoid unnecessary disputes and financial losses.

Seeking early mediation through the QBCC or formal resolution through QCAT can help prevent costly legal battles and ensure fair outcomes for all parties involved.

What are Damages for Delays?

When contractual breaches occur, or the contract terms are not entirely fulfilled, the party affected by the breach is generally entitled to claim compensation for the damage incurred.

A key provision of a construction contract is the period allocated to the project’s completion. This is because clients may be significantly inconvenienced by the project and require an expected time to occupy and utilise the building, which can be unreasonably extended if this clause is not included.

As such, a building contract must follow the agreed-upon period for the project to be completed to protect the interests of the parties involved. When the contract fails to do so, the client can claim damages.

The key concept of damages is restoring the damaged party to the position they would be in if the breach had not occurred. Damages are a key concept in contracts, serving to protect parties from breaches and ensure all obligations are upheld.

Types of Delay Damages in Construction Contracts

Delays are common in construction industry projects and can have significant implications for all parties involved. Understanding the various types of delays is crucial for effective project management and determining contract rights and responsibilities.

Construction delays refer to events or conditions that impede work progress, causing the project to extend beyond its scheduled completion date. These delays can be categorised based on their nature and the party responsible:

Liquidated Damages

The first head of damage you may encounter in a construction contract is liquidated damages. Liquidated damages are a form of damages that are established in the contract.

They are a predetermined amount agreed upon by both parties as the sum to be paid for project delays. When establishing liquidated damages, it is important to have an open discussion and ensure both parties understand the implications and agree to include the clause.

Delay damages of this sort will generally be applied daily, meaning each day of delayed time requires a damages payment. By including liquidated damages in your contract, you ensure that both parties are protected from the unknown of building contracts and avoid disputes by establishing a set amount of compensation for delays.

Many standard residential building contracts set liquidated damages at $50 per day unless a different amount is specified. The actual amount should be a genuine pre-estimate of the homeowner’s potential loss; courts may deem excessive penalties unenforceable.

Direct (Compensation) Damages

Another type of damage that may apply to a construction contract is direct damage. Direct damages, or actual damages, are the real losses a party experiences because of a delay.

They include additional expenses, loss of use of the building, loss of rent or revenue, and other expenses that may be incurred because of a delay in a building project. These damages are generally easy to prove, as they can be supported with financial records or other evidence.

Consequential Damages

Consequential damages are another head of damage you may encounter in your building and construction contract. Consequential damages can be difficult to manage in a project.

This type includes indirect damages that result from the delay and can be complex to cost. These may include damage to a business’s reputation or standing or loss of opportunities that may have arisen if the building had been completed on time.

It can be difficult to prove consequential damages when a delay occurs, so ensure you collect as much evidence as possible if you find yourself in this situation!

When is a Builder Liable for Delays?

A builder is generally liable for project delays if they fail to complete work by the Date for Practical Completion and do not have a valid Extension of Time (EOT).

Under Queensland law, the Date for Practical Completion is the agreed deadline by which the builder must finish the contracted work to a stage where it can be used for its intended purpose, even if minor defects still require rectification.

A builder may be liable for delays if:

1. They do not complete construction within the contractual timeframe and have not applied for or been granted an EOT.
2. The delay is caused by mismanagement, lack of resources, or failure to coordinate subcontractors.
3. They ignore or fail to meet contractual requirements, such as ordering materials late when supply chain delays were foreseeable.
4. They fail to notify the homeowner of unavoidable delays and do not provide proper documentation for an EOT claim.

If a builder is found liable for an unjustified delay, the homeowner may be entitled to:

1. Liquidated Damages – If included in the contract, the homeowner may claim a pre-agreed financial penalty (e.g., $50 per day) for every day the project remains incomplete beyond the agreed timeframe.
2. General Damages – If liquidated damages are not specified, homeowners may seek compensation for actual financial losses, such as extra rent, mortgage costs, or storage fees.
3. Contract Termination – In cases of excessive or prolonged delays, homeowners may have the legal right to terminate the contract and seek further damages.
4. QBCC or QCAT Dispute Resolution – If delays cause financial loss or breach contractual terms, Homeowners can file a complaint with the QBCC or escalate the matter to the Queensland Civil and Administrative Tribunal (QCAT).

Homeowner Rights and Remedies

When a builder fails to meet contractual deadlines, homeowners have several legal avenues to protect their interests and seek compensation. Homeowners can claim financial compensation in the following ways:

1. Liquidated Damages – If specified in the contract, homeowners can claim a fixed daily or weekly penalty for each day the project is delayed.
2. General Damages – If liquidated damages are not included, homeowners can seek compensation for actual financial losses. Still, they must prove the extent of their damages (e.g., rent receipts and storage costs).
3. Formal Complaint to the QBCC – If the builder refuses to acknowledge responsibility, homeowners can lodge a dispute with the QBCC, which may lead to mediation, an enforceable direction, or a referral to QCAT.

A homeowner may terminate a construction contract due to delays if:

1. The builder fails to complete the project within the agreed timeframe and does not obtain a valid EOT.
2. The delays are unreasonable and cause significant financial or personal hardship.
3. The builder abandons the project without a valid reason.
4. The contract includes a specific termination clause for excessive delays, allowing the homeowner to end the agreement lawfully.

Before terminating a contract, homeowners must:

1. Follow the contract’s dispute resolution procedures, including giving the builder a written notice of the delay and an opportunity to rectify the issue.
2. Consult legal advice to ensure termination is lawful and does not expose them to a counterclaim by the builder.

If a contract is wrongfully terminated, the homeowner may be liable for damages to the builder, so legal guidance is strongly recommended.

Builder Rights and Defences Against Delay Claims

While builders can be held accountable for unjustified delays, they also have legal defences if delays occur beyond their control. The QBCC Act and construction contracts provide specific protections for builders facing unforeseeable or unavoidable delays.  A builder can defend against a delay claim by proving that:

1. An event beyond their control caused the delay, such as extreme weather (cyclones, floods), global or national supply chain shortages, delays caused by the homeowner (e.g., failure to select materials, late payments), and council or government permit delays.
2. They submitted a valid EOT claim with supporting documentation and/or they made reasonable efforts to mitigate the delay, such as sourcing alternative materials or adjusting project scheduling.

Defences Under the QBCC Act and Contract Provisions

Under Queensland law, a builder may not be liable for delays if:

1. The contract contains specific provisions allowing for extensions of time in cases of unavoidable delays.
2. The homeowner caused or contributed to the delay (e.g., requested major design changes or failed to meet financial obligations).
3. The contract does not clearly define liquidated damages, making it difficult for the homeowner to claim compensation.
4. The prevention principle applies—this legal principle states that if a homeowner’s actions directly caused the delay, they cannot enforce liquidated damages or penalise the builder for missing the deadline.

Builders in Queensland must complete projects on time or risk contractual penalties, financial liabilities, and potential legal action. However, homeowners cannot automatically penalise builders for delays, as Queensland law allows builders to claim extensions of time for valid reasons.

Homeowners have rights to compensation and contract termination but must follow proper legal procedures to avoid wrongful termination disputes. Similarly, builders can defend against delay claims by proving that delays were unforeseeable, beyond their control, and properly documented.

Navigating construction delays requires careful contract management, adherence to QBCC regulations, and open communication between builders and homeowners.

Seeking legal advice or using QBCC dispute resolution services can help both parties avoid costly disputes and ensure fair outcomes.

The Prevention Principle in Queensland Construction Law

The Prevention Principle is a well-established legal doctrine in construction industry law that prevents one party to a contract—typically the homeowner or principal—from enforcing liquidated damages or other penalties for delays if they were responsible for causing those delays.

In other words, if a homeowner’s actions directly contribute to a construction delay, they cannot hold the builder liable for failing to meet the contractual completion date.

This principle is based on fundamental contract law—a party should not be able to benefit from its own wrongful act. If a principal (homeowner or developer) causes delays by, for example, failing to approve design variations on time, delaying material selections, or restricting site access, then they cannot enforce liquidated damages or claim breach of contract against the builder.

How the Prevention Principle Affects Claims for Extensions of Time

The Prevention Principle is particularly relevant when a builder applies for an Extension of Time (EOT) under a construction contract. If the homeowner causes a delay—such as late approvals, failure to make payments, or delivery of owner-supplied materials—the builder is entitled to an EOT to reflect the additional time needed to complete the work.

However, if the contract does not contain a valid EOT mechanism, the Prevention Principle may apply to prevent the homeowner from enforcing the original completion deadline. In such cases, the deadline may be set “at large,” meaning the builder must only complete the project within a “reasonable time” rather than the original contractual period.

To avoid disputes, most Queensland construction contracts, including QBCC, HIA, and Master Builders contracts, include EOT provisions allowing builders to claim additional time for homeowner-caused delays. If a builder fails to apply for an EOT within the required timeframe, they may lose their right to an extension, even if the homeowner caused the delay.

Application in Queensland Construction Law

In Queensland, the Prevention Principle is often applied in construction disputes, particularly in cases involving liquidated damages claims or rejected EOT requests. Courts and tribunals, including the Queensland Civil and Administrative Tribunal (QCAT), have upheld the principle in cases where homeowners or developers failed to meet their contractual obligations, preventing the builder from completing the project on time.

Under Queensland’s QBCC Act, builders must complete work within the agreed timeframe. Still, if the homeowner’s actions interfere with the project’s progress, the builder has a legal right to seek an EOT. Suppose no valid EOT provisions exist in the contract. In that case, the Prevention Principle can be used as a defence to argue that time should be set “at large,” removing liability for delay-related penalties.

How the Prevention Principle Impacts Builder Liability

The Prevention Principle is a key defence for builders facing liquidated damages claims or breach of contract disputes due to project delays.  If the homeowner caused the delay, the builder can argue that they should not be penalised for failing to meet the original deadline.

If the contract lacks an EOT clause, time may be set “at large,” meaning the builder is only required to complete the work within a “reasonable” timeframe.

If a homeowner refuses to approve reasonable EOT requests, the builder can challenge liquidated damages claims by arguing that the homeowner was responsible for the delay.

If the contract includes an EOT process, the builder must follow the required steps to obtain an extension. Failure to submit an EOT request on time may result in the builder losing the ability to argue that delays were beyond their control.

If the builder fails to keep proper records of homeowner-caused delays, they may struggle to prove that the Prevention Principle applies in their case.

The Prevention Principle is a critical concept in Queensland construction law. It ensures that homeowners cannot enforce liquidated damages or contract penalties when they have contributed to project delays. While this principle provides a strong defence for builders, it is most effective with proper contract management, timely EOT applications, and thorough documentation.

Understanding the Prevention Principle is essential for homeowners to ensure they do not unintentionally invalidate delay claims by causing or contributing to delays. For builders, complying with EOT procedures and maintaining clear records of all project delays is the best way to protect against unfair liability claims.

In dispute cases, seeking legal advice or QBCC mediation can help both parties resolve issues before they escalate into costly legal battles.

Negotiating Delay Damage Clauses

When you are forming a delay damage clause in a contract, it is essential that you undergo some negotiation to ensure the agreement is fair and agreed upon by both parties. During the formation of the clause, you should discuss what each party believes defines a delay to ensure both parties are aware of the full scope of their obligations.

A key aspect of the negotiation process is the amount set as the liquidated damages. It is essential that this amount is reasonable and reflects the seriousness of the damages that will likely result from a delay.

As the client, insisting on extreme amounts as repayment may discourage contractors from working on your project, as delays can sometimes not be avoided, so it is essential to set reasonable damages.

You should also ensure that you address potential causes for damages that may be out of the other parties’ control, such as extreme weather. This may result in the inclusion of a force majeure clause, which protects a party from penalties for uncontrollable events.

Key Client Considerations for Damages for Delay

Before seeking damages for a construction delay, it is crucial to understand the contractual terms, liability requirements, and methods for quantifying damages.

Not all delays automatically entitle a homeowner to compensation, as factors such as liquidated damages clauses, extensions of time (EOTs), and the homeowner’s actions can impact a claim.

Additionally, proving actual financial loss and following proper dispute resolution procedures—such as mediation or QBCC intervention—may be necessary before escalating to legal action.

Carefully reviewing the contract and understanding your rights can help ensure a fair and enforceable claim, especially the following:

Contractual Terms

The first thing you should consider before claiming damages for a delay in a construction contract is the terms of the contract itself. Several contractual terms may play a key role in the claiming of damages, so it is essential that you closely read your agreement before applying.

As we have discussed, your contract may include a liquidated damage clause that sets the amount to be paid when a delay occurs.

Furthermore, you should check your agreement for an extension of time clause, which, if appropriately executed, may permit the delay and prevent you from claiming damages.

Liability

Another key consideration that should be made is your ability to prove that a delay has occurred. As the client, you must show that the builder’s actions have resulted in an actual delay in the completion of the project.

Furthermore, if your actions have played into the delay, you cannot claim damages. As such, it is essential that you prove that a delay has taken place and it was entirely the contractor’s fault.

Quantifying Damages

Establishing the amount of damages should be another consideration that you should make when claiming damages in a building contract.

For starters, providing a genuine and reasonable estimate of the damages is essential, as excessive amounts may be considered unreasonable. You must prove that you have experienced some loss because of the delay, such as additional expenses or lost income.

Alternative Dispute Resolution

You should consider alternative dispute resolution options before taking action to claim damages. Your contract may include a provision that requires you to use alternative dispute resolution methods before claiming damages.

Best Practices for Builders

Effectively managing construction delays is essential to protecting your business, avoiding liability, and maintaining client relationships.

By understanding your contractual obligations, providing timely notice of delays, and taking proactive steps to mitigate disruptions, you can minimise the risk of disputes and financial penalties.

Clear and open communication with clients throughout the project can also help prevent misunderstandings and support your position if a delay claim arises.

Following these best practices ensures that delays are handled professionally and in compliance with Queensland construction laws.

Understand Your Contract

As a builder, an in-depth understanding of your contract and the rights and responsibilities it provides is essential. Understanding what the contract says and its legal implications from the beginning of the agreement is essential to protecting your interests.

If a client claims delay damages against you, the first step is to reread your contract and check for any provisions you may have missed or that can help you.

For example, an extension of time clause, as we mentioned earlier, may permit a delay, but you must properly manage it to be effective.

Provide Timely Notice

If you believe a delay will occur in your building contract for any reason, notifying your client should be your first move.

By providing efficient notice of a delay or an expected issue with the timeliness of the project, you provide your client with the time to prepare and prevent unnecessary harm.

Furthermore, you may be able to claim an extension of time and avoid damage claims altogether!

Mitigate Delays Where Possible

This practice may seem a little obvious, but taking the appropriate steps to prevent or minimise delays in your construction is an important concept.

You should attempt to prevent delays in your contract by allocating resources, adjusting schedules, and taking other measures that may decrease the chance of a delay. As you do so, you should take the time to document your attempts to mitigate delays thoroughly in case a delay does arise.

If you are faced with an unavoidable delay, providing evidence that you took the proper steps to prevent it can be valuable to decreasing damage costs.

Communicate Openly

Communicating openly with your client is the key to any successful business relationship. As issues arise in your project, efficiently inform your client of the problem and the steps you are taking to resolve it.

You should also try to include your client in the problem-solving process and seek their guidance throughout to ensure you consider their thoughts.

Furthermore, you should document your interactions regarding potential delays, as this may help your case if a claim for damages arises.

Communicating effectively with your client can help minimise issues and address them efficiently if they arise, preventing disputes and supporting your side of a delay damage claim.

Managing Construction Delays

Construction delays are a common challenge in Queensland’s building industry, often leading to financial strain, legal disputes, and project disruptions.

Both homeowners and builders have roles to play in minimising delays and managing them effectively when they occur.

Both parties can reduce risks and prevent costly conflicts by ensuring clear contract terms, effective project management, and proper dispute resolution.

Managing Construction Delays – For Homeowners

Homeowners should ensure that construction contracts clearly outline how delays will be handled, including:

1. Defined project timelines and completion dates, with flexibility for unavoidable delays.
2. Clear provisions for extensions of time (EOTs), specifying which delays qualify for extensions.
3. Liquidated damages clauses to ensure compensation if delays occur without a valid EOT.
4. Both parties’ responsibilities include approvals, material selections, and site access obligations.

A construction lawyer should review contracts before signing to confirm that delay clauses are fair and enforceable under Queensland’s QBCC Act.

Construction projects rarely go as planned, so homeowners should build contingencies into their schedules. Best practices include:

1. Allowing extra time for potential weather disruptions, material shortages, or council approval delays.
2. Discuss realistic build times with the builder before signing the contract.
3. Planning alternative accommodation arrangements in case of extended delays.
4. Communicating regularly with the builder to stay informed about project progress and any expected delays.

By setting realistic expectations and contractual safeguards, homeowners can avoid unnecessary disputes and financial losses caused by unexpected delays.

Managing Construction Delays – For Builders

Builders can significantly reduce the risk of delays by implementing strong project management practices, including:

1. Scheduling work efficiently to ensure trades and materials are available when needed.
2. Monitor progress closely and proactively address delays before they escalate.
3. Communicating early with subcontractors and suppliers to mitigate potential supply chain issues.
4. Providing regular updates to homeowners to manage expectations and avoid misunderstandings.

By anticipating risks and addressing them early, builders can minimise project disruptions and maintain strong client relationships.

Accurate documentation is essential for builders to protect themselves from liability in disputes. Builders should:

1. Record all communications with homeowners regarding approvals, variations, and concerns.
2. Keep written records of delay notifications, including EOT requests and supporting evidence.
3. Document site conditions, weather events, and supply shortages contributing to project delays.
4. Ensure subcontractor agreements are in writing, specifying timelines and responsibilities.

Well-maintained records can support EOT claims and defend against liquidated damages or contract termination in a dispute.

Managing Construction Delays – For Both Parties

Legal action should be a last resort when disputes arise over construction delays. Queensland provides several alternative dispute resolution (ADR) mechanisms to resolve issues efficiently:

The first step should always be open and honest discussions between the homeowner and builder. Many disputes can be resolved by agreeing on revised timelines, compensation, or additional EOTs.

The Queensland Building and Construction Commission (QBCC) offers free mediation services to help parties reach a fair resolution. Mediation can result in binding agreements, avoiding lengthy legal battles.

If mediation fails, disputes may be escalated to QCAT, which handles residential construction disputes. QCAT can order compensation, contract adjustments, or project completion deadlines.

Homeowners or builders may pursue court action if no resolution is reached through QBCC or QCAT. Litigation can be expensive and time-consuming, so ADR is preferred wherever possible.

By prioritising negotiation and mediation, homeowners and builders can quickly resolve disputes, avoid unnecessary costs, and keep projects on track.

Delays in Construction Contracts – Key Takeaways

Managing construction delays requires a solid understanding of legal obligations, contractual rights, and dispute resolution processes under Queensland law.

Whether you are a homeowner or a builder, knowing key legal provisions, standard contract terms, and potential liabilities can help avoid costly disputes and ensure projects are completed smoothly.

Standard construction contracts in Queensland—such as HIA, QBCC, and Master Builders contracts—include delay clauses that outline how extensions of time (EOTs), compensation, and penalties are managed.

Contracts must clearly define what qualifies as a legitimate delay, including provisions for:

1. Unforeseen site conditions (e.g., underground utilities, soil issues).
2. Extreme weather events (e.g., floods, cyclones).
3. Supply chain disruptions (e.g., material or labour shortages).
4. Homeowner-caused delays (e.g., late approvals, delayed payments).

Builders must follow strict contractual procedures when applying for an EOT, including:

1. Providing written notice to the homeowner within the required timeframe.
2. Submitting supporting documentation, such as supplier notices or weather reports.
3. Demonstrating that reasonable efforts were made to mitigate delays.
4. Failure to comply with EOT procedures may result in contractual penalties, liquidated damages, or liability claims.

If a builder fails to complete work by the Date for Practical Completion without a valid EOT, the homeowner may claim:

1. Liquidated damages, which are pre-agreed daily penalties for late completion.
2. General damages cover actual financial losses (e.g., rent, storage costs).
3. Contract termination if the delays are excessive or unreasonable.

The Queensland Building and Construction Commission (QBCC) provides mediation services to help resolve disputes before they escalate to legal proceedings.

If an agreement cannot be reached, disputes can be taken to the Queensland Civil and Administrative Tribunal (QCAT), which handles residential construction disputes.

Legal action should be a last resort, as it can be costly and time-consuming.

Both homeowners and builders must clearly understand their contractual rights and legal responsibilities under Queensland law to avoid disputes and financial losses.

For Homeowners:

1. Ensure your contract defines project timelines, delay provisions, and compensation entitlements.
2. Understand your rights to claim liquidated damages or terminate a contract if the builder fails to meet deadlines.
3. Be aware that your actions (such as late approvals or payment delays) could impact the project timeline, potentially reducing your ability to claim damages.

For Builders:

1. Familiarise yourself with EOT provisions and QBCC regulations to ensure compliance.
2. Keep detailed records of all communications, delay notices, and mitigation efforts.
3. Understand that liquidated damages can be enforced if delays are unjustified—proper documentation is crucial to defending against claims.
4. If a homeowner causes a delay, formally notify them in writing to protect yourself from liability under the Prevention Principle.

By understanding these rights and obligations, both parties can reduce the likelihood of disputes, improve communication, and ensure a smoother project completion process.

Final Tips for Homeowners to Avoid Delay Disputes

For Homeowners:

1. Review contracts carefully before signing and seek legal advice if needed.
2. Maintain open communication with the builder and promptly respond to requests for approvals or selections.
3. Be realistic about timelines and factor in potential delays due to weather, material shortages, and site conditions.
4. Document everything, including delay notices, builder communications, and financial transactions.
5. Use alternative dispute resolution (mediation or QCAT) before resorting to legal action.

Final Tips for Builders to Avoid Delay Disputes

For Builders:

1. Follow proper procedures for EOT claims—notify homeowners in writing and provide supporting evidence.
2. Keep detailed records of project schedules, supply chain issues, and site conditions to justify delays.
3. Communicate frequently with homeowners to manage expectations and avoid misunderstandings.
4. Ensure all contract terms are followed to protect against liquidated damages and termination risks.
5. Seek legal advice early if a dispute escalates beyond QBCC mediation.

By taking a proactive and informed approach, homeowners and builders can mitigate risks, manage delays effectively, and avoid costly disputes.

A well-drafted contract, clear communication, and adherence to Queensland’s construction laws are the best ways to ensure a successful project outcome for all parties involved.

Delays in Construction Contracts – FAQ & Answers

Construction delays can lead to financial losses, legal disputes, and project disruptions for both homeowners and builders in Queensland.

This FAQ section answers common questions about delay causes, legal rights, extensions of time (EOTs), compensation, and dispute resolution, helping all parties navigate their contractual obligations effectively.

What are the most common causes of construction delays in Queensland?

Unforeseen site conditions, extreme weather events, supply chain disruptions, and contractual disputes can cause construction delays. Homeowner-requested design variations, council approval delays, and late progress payments can also contribute to project setbacks. Builders may also face labour shortages, material unavailability, or errors in architectural plans that impact the timeline. Understanding the cause of a delay is crucial in determining whether an extension of time (EOT) can be granted and if compensation applies.

When is a builder entitled to an extension of time (EOT)?

A builder is entitled to an EOT if the delay is caused by circumstances beyond their control, such as extreme weather, supply shortages, or council approval delays. To qualify, the delay must be excusable and meet contract provisions, and the builder must notify the homeowner in writing within the required timeframe. The claim should accompany supporting evidence, such as weather reports or supplier notices. If the builder fails to follow the correct procedure, the EOT may be rejected, leading to potential liability for liquidated damages.

What happens if a builder fails to complete the project on time?

If a builder does not meet the Date for Practical Completion and has not been granted an EOT, they may be liable for liquidated damages as outlined in the contract. The homeowner may also claim general damages if they can prove actual financial losses, such as increased rent or storage costs. In severe cases of prolonged delays, the homeowner may have the right to terminate the contract and seek further compensation. Builders who experience unavoidable delays should follow proper documentation and notification procedures to avoid financial penalties.

Can homeowners claim compensation for construction delays?

Yes, homeowners may claim liquidated damages if the contract specifies a pre-agreed daily penalty for late completion. If no liquidated damages clause exists, they may seek general damages, but they must prove actual financial loss due to the delay. Compensation claims depend on whether the delay is excusable or non-excusable and whether the builder has followed contractual obligations. If disputes arise, homeowners can lodge a complaint with the QBCC or escalate the matter to QCAT for resolution.

What is the Prevention Principle, and how does it affect construction delays?

The Prevention Principle states that a party cannot enforce contract penalties for a delay they caused. If a homeowner fails to approve design variations, delays material selections, or restricts site access, they may be prevented from claiming liquidated damages against the builder. In such cases, time may be set “at large,” meaning the builder is only required to complete the project within a reasonable timeframe rather than the original deadline. To avoid disputes, builders should document all delays caused by the homeowner and formally request an EOT.

How do supply chain disruptions impact construction contracts?

Material shortages and delivery delays can halt construction progress and create unexpected costs for builders and homeowners. Under Queensland construction law, supply chain disruptions may qualify for an EOT if unforeseeable and beyond the builder’s control. However, the builder may not be entitled to an extension if the delay was foreseeable when signing the contract. Builders should document supplier notices and attempts to source alternative materials to support any EOT claims.

What should be included in a construction contract to manage delays?

A well-drafted contract should include clear provisions for delays, outlining when extensions of time (EOTs) apply and whether liquidated damages will be enforced. It should also specify notification requirements, such as how and when the builder must inform the homeowner of a delay. The contract should define approvals, material selections, and site access responsibilities to prevent disputes over delay claims. Having a construction lawyer review the contract before signing can protect both parties’ rights.

What are liquidated damages in construction contracts?

Liquidated damages are a pre-agreed financial penalty set in the contract that applies if the builder fails to complete the project on time. The amount is usually calculated per day of delay and should reflect a genuine estimate of the homeowner’s potential loss. Queensland courts may rule excessive liquidated damages as unenforceable, so the agreed amount must be reasonable. Homeowners should include a liquidated damages clause in their contract to safeguard against project overruns.

How can builders protect themselves from delay-related disputes?

Builders should keep detailed records of all communications, site conditions, material deliveries, and project progress. Properly documenting weather disruptions, supply chain issues, and homeowner-caused delays can support EOT claims and defend against liquidated damages. To avoid potential liability, builders must submit EOT requests on time and ensure that all contractual obligations are met. In the event of a dispute, seeking mediation through the QBCC before escalating to QCAT can help resolve issues efficiently.

Can a homeowner terminate a contract due to excessive delays?

Yes, a homeowner may have the right to terminate the contract if delays are prolonged, unreasonable, and not excused by an EOT. Before terminating, they must follow the contract’s dispute resolution procedures, including giving the builder formal notice and an opportunity to rectify the delay. If the contract includes a termination clause for excessive delays, this will determine the proper legal process. Seeking legal advice before terminating can prevent wrongful termination claims from the builder.

How can construction delays be prevented?

Delays can be minimised by establishing clear timelines, maintaining strong communication, and managing risks proactively. Homeowners should ensure that design approvals, material selections, and payments are made on time to avoid unnecessary hold-ups. Builders should implement effective project management strategies, such as scheduling trades efficiently and securing materials in advance. Both parties should consider alternative dispute resolution methods (ADR) to resolve potential delays before they escalate into costly legal disputes.

What role does the QBCC play in resolving construction disputes?

The Queensland Building and Construction Commission (QBCC) provides mediation services for homeowners and builders to resolve disputes before taking legal action. If an agreement cannot be reached, the QBCC may issue a binding decision or refer the matter to QCAT. The QBCC can also discipline builders who repeatedly fail to meet contractual obligations, including suspending licences. Homeowners and builders should attempt to resolve disputes through the QBCC before escalating the matter to court.

How does QCAT handle construction delay disputes?

The Queensland Civil and Administrative Tribunal (QCAT) hears residential construction disputes, including claims for delays, liquidated damages, and contract breaches. It can award compensation, enforce EOTs, and terminate contracts if necessary. Before filing a claim, parties must first attempt mediation through the QBCC. QCAT provides a cost-effective alternative to litigation, making it a preferred forum for resolving delay-related disputes.

What are the risks of not correctly claiming an EOT?

If a builder fails to properly claim an extension of time, they risk being held liable for delay-related damages. If the project is significantly delayed, the homeowner may enforce liquidated damages or seek contract termination. Without proper documentation, the builder may lose the ability to defend against liability claims under the Prevention Principle. Ensuring EOT claims are submitted correctly and within the contract’s timeframe is essential to avoid financial penalties.

What should homeowners and builders do if a delay dispute arises?

Both parties should first attempt to resolve the issue through open communication and negotiation. If unresolved, mediation through the QBCC can help reach an agreement without escalating to QCAT or court proceedings. If mediation fails, the dispute may be referred to QCAT for a legally binding decision. Seeking legal advice early can help homeowners and builders understand their rights and obligations before pursuing legal action.

What are delay damages in construction?

Delay damages are financial compensation claimed when a construction project exceeds the agreed completion date without a valid extension of time (EOT). These damages compensate the affected party—typically the homeowner or developer—for financial losses caused by the delay, such as extra rent, mortgage payments, or business losses. Delay damages can be pre-agreed (liquidated damages) or assessed based on actual financial loss (general damages). To successfully claim delay damages, the contract must outline explicit provisions for delays, and the affected party must prove the economic impact of the delay.

What is the difference between liquidated damages and delay damages?

Liquidated damages are a pre-agreed fixed amount set in the construction contract, payable if the builder fails to complete the project on time. These damages are typically calculated daily or weekly, making it easier to enforce and reducing disputes over compensation amounts. Delay damages, on the other hand, refer to general compensation for actual financial losses suffered due to a project delay. Unlike liquidated damages, delay damages require the affected party to prove their losses, such as additional rent, lost income, or storage costs.

Can you charge a builder for taking too long?

Yes, suppose a builder fails to complete the project within the agreed timeframe and does not have a valid EOT. In that case, the homeowner may be entitled to liquidated damages or general damages. Liquidated damages can be enforced if the contract includes a specific clause outlining a fixed penalty for each day of delay. If no such clause exists, the homeowner may still claim general damages, but they must prove actual financial losses resulting from the delay. If a dispute arises, homeowners can seek mediation through the Queensland Building and Construction Commission (QBCC) or escalate the matter to QCAT.

What is a delay in construction contracts?

A delay in a construction contract occurs when the project does not progress according to the agreed timeline, causing completion to extend beyond the scheduled date. Delays can be excusable (e.g., extreme weather, supply shortages, unforeseen site conditions) or non-excusable (e.g., poor project management, builder mismanagement, subcontractor issues). The contract typically defines how delays are handled, including whether the builder can claim an EOT or if the homeowner is entitled to compensation for late completion. Proper documentation and adherence to contractual notice requirements are crucial in managing delays and avoiding disputes.