In Crescendas Bionics Pte Ltd v Jurong Primewide Pte Ltd  SGHC 4, the Singapore High Court ("SGHC") dealt with the issue of delay caused by an employer's act of prevention, particularly in the context of a construction contract that did not contain an extension of time ("EOT") clause. In this case, the plaintiff property developer employed the defendant contractor for the construction of a business park. The signed Letter of Intent, which both parties agreed to be legally binding on them, contained a clause specifying the date of completion and a liquidated damages clause but did not include an EOT clause. When the project was certified to be completed after the specified completion date, the plaintiff sued the defendant for, inter alia, liquidated damages for the delay in completion. The defendant, in its defence, argued that since the plaintiff was responsible for the delays and there was no EOT clause, time was at-large and it only needed to complete its works within a reasonable time.
Pertinently, the Court held that where an EOT clause is absent, and the employer commits an act of prevention:
- The contractor is no longer bound by the original contractual completion date;
- Any liquidated damages clauses entered into between the parties is rendered inoperative; and
- The contractor is under an obligation to complete the project within reasonable time and failure to do so will render the contractor liable for general damages.
In deciding the reasonable time for completion by the contractor, the Court applied the following principles in Fongsoon Engineering (S) Pte Ltd v Kensteel Engineering Pte Ltd  SGHC 82:
- What constitutes a reasonable time is a question of fact;
- When determining reasonable time, the court must strike an appropriate balance between not allowing the employer to take advantage of its own fault and not giving the contractor any other additional time other than that caused by the employer's delay; and
- The method of determining reasonable time by simply adding the employer's delay to the contractual completion time is merely a guide on calculating reasonable time which meets the above two considerations.
This case therefore elucidates the importance for EOT clauses to be properly drafted and included in construction contracts so as to ensure that, in the event an employer commits any act of prevention, (1) a new date may be set for completion and (2) the employer's right to liquidated damages will be preserved. Otherwise, the employer will only be entitled to claim for general damages, and this is so only if the contractor fails to complete the project within reasonable time.
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