Contractual penalty or bonus for deadlines

Hello everyone,

one often reads here that construction contractors dawdle or threaten with work stoppages if "price adjustments" are not agreed to.
Why is it that, given the high costs for the average consumer, no penalties for delays in deadlines are used? Is it even common to agree on fixed deadlines in the contract?
And what about bonuses for the contractor if he finishes faster?

Hello everyone,

One often reads here that construction companies dawdle or threaten to halt construction if "price corrections" are not agreed to.
Why is it actually that, given the high costs for the average consumer, contractual penalties for deadline overruns are not used? Is it even common to agree on fixed dates in the contract?
And what about bonuses for the contractor if they finish early?

Well, we have a ten-month construction time guarantee for our bungalow. If this is exceeded and it is the construction company's fault, we get €200 for each day exceeded. However, there are no bonuses for building faster. Since we are currently very satisfied with the construction, we probably won't insist on it if there are only a few weeks' delay. We do not incur very high costs (only rent amounting to €550). That is all manageable. Besides, the construction company has also accommodated us in other matters. Above all, they have adhered to the fixed-price guarantee, which was not unimportant to us :-)

Why is it that, despite the high costs for the average consumer, contractual penalties for deadline overruns are not used? Is it even common to agree on fixed deadlines in the contract?

They are. Contractual penalties for deadline overruns are common. Often, however, homeowners don’t even think to discuss this with the company ;) . Construction time guarantees are common. However, the start of construction cannot be fixed strictly, as it often depends on external factors. But there are also sufficient (usual) formulations for this: e.g., X days/weeks after building approval or similar.

And what about bonuses for the contractor if he is faster?

Such things exist in large projects in Switzerland. After all, if the highway is repaired faster, everyone benefits. In Germany, I have never heard of that. In the area of private builders, I also find that somewhat difficult to imagine. You make your calculation and then the contractor comes and wants €10,000 more because he was 2 months faster. I would like to see most people's reactions then ;)

Such things exist in large projects in Switzerland. If the highway is renovated faster after all, everyone benefits. I have never heard of this in Germany. In the area of private builders, I also find that a bit difficult. You make your calculation and then the contractor comes and wants €10,000 more because he was 2 months faster. I would like to see most people then ;)

Or the construction company writes in the contract instead of a 10-month construction time guarantee: 10 + 2 = 12 months construction time guarantee. It is then always finished at the latest in 10 months and collects the money :cool:

My general contractor said back then, normally they manage it in 10 months but he writes 12 because he has to guarantee the construction time. But it seems to me, with the current material madness, those extra two months are needed ;)