Successfully Represented a Major Construction Company in Delay Compensation Claim Involving Delayed Construction Commencement
2024.12.12.
Yulchon successfully represented a major construction company in a dispute where construction commencement was substantially delayed for 1,875 days due to instructions from the project owner. Despite the legal complexities typically associated with pre-commencement delays claims, we obtained a favorable ruling awarding delay compensation.
While courts often distinguish between delays in the commencement of construction and suspensions after construction has started—generally rejecting compensation claims in the former—, Yulchon challenged this conventional approach. We argued that delay compensation, as a form of liquidated damages, should apply regardless of the construction stage, as contractors face equivalent financial harm from delayed payments. The court accepted this argument, awarding a substantial portion of the claimed amount.
Given the increasing number of construction projects facing prolonged delays due to factors such as budgetary constraints, this ruling provides meaningful guidance on how to assess delays prior to actual commencement—pending any further clarification by higher courts.
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