TRIPLE POINT TECHNOLOGY – POINTING TO CONFUSION
Pupil barrister, Atkin Chambers ([email protected]
Liquidated damages for delay are ubiquitous in modern construction contracts. 1 Usually, a clause will specify that in the event of delayed completion by the Contractor, an £x amount will be paid at a rate per day or week. 2 A contractor who culpably delays work ordinarily proceeds to finish that work, and its liability to pay liquidated damages for delay to completion will be taken into account when settling the final account between the parties.
What happens when a contractor not only culpably delays the work, but refuses to or is seemingly unable to finish the work at all? In the recent case of Triple Point Technology Inc v PTT Public Company Ltd , 3 the Court of Appeal considered the right of the Employer to claim liquidated damages in the context of abandonment by the original contractor.
There are three sections in this paper. The first section provides the necessary background: it notes the purpose of liquidated damages in construction contracts, summarises the previous approaches of the courts in similar claims for liquidated damages in abandonment, and finally surveys the approach adopted in Triple Point Technology . The second section criticises the court’s decision to disapply the liquidated damages clause for three reasons. First, the decision the Court of Appeal relied on as authoritative did not truly decide the point at common law and should have been distinguished. Secondly, the disapplication of the liquidated damages clause departs from the accepted understanding of accrued rights in the context of termination; and lastly, that the practical significance of Triple Point Technology creates an anomaly that incentivises breach of contract and undermines the bargain between the parties. In its final section, this paper will propose that Triple Point Technology ought to have taken what this paper terms “the Orthodox approach”, and suggests the arguments available in reforming the law as it stands.
* This paper is based on one of two joint winning entries in the Society of Construction Law’s Hudson essay competition 2019 which has been published by the SCL at www.scl.org.uk. This version is published here with the permission of the author and the SCL.
1 Hudson’s Building and Engineering Contracts , 14th Edition, paragraph 6-022.
2 2017 FIDIC Red, Yellow and Silver Books (cl 8.8), the NEC4 Engineering and Construction Contract (Option X7), 2016 JCT Standard Building Contract (cl 2.32).
3 Triple Point Technology Inc v PTT Public Company Ltd (CA)  EWCA Civ 230;  BLR 271 ;  1 WLR 3549;  3 All ER 767; 183 Con LR 24.
Pt 2] Triple Point Technology