Acceleration of Contract Performance
Acceleration of Contract Performance
________________________, referred to as CONTRACTOR, and _____________________, referred to as OWNER, agree:
The parties have entered into an agreement for ___________________________, on _________________. Pursuant to this agreement, and any modifications thereto, substantial completion of the work is scheduled on _________________.
OWNER desires that the work be substantially complete on or before _________________.
CONTRACTOR, in consideration of an additional payment of $__________ (_____________________________ & _____/100) due on or before _________________, herewith agrees to complete all work in accordance with the plans and specifications of the original contract by _________________.
Time is of the essence in this contract. The parties agree that if the work is not completed within the time set forth in this agreement, the OWNER shall suffer damages, which shall be difficult of calculation. Accordingly, solely as liquidated damages and not as a penalty, the CONTRACTOR shall pay to OWNER the sum of $ __________ (_____________________________ & _____/100 dollars) per ______________ beyond the date specified for the completion of the work herein.
Other than those changes set forth herein, the original contract dated _________________ shall remain in full force and effect.
This is the entire agreement between the parties and this agreement may only be further amended in writing.
Dated: _______________
________________________________
________________________ By Owner
________________________________
_____________________ By Contractor
Acceleration of Contract Performance
Review List
This review list is provided to inform you about this document in question and assist you in its preparation. Time is money, especially in the construction business. This agreement can reward a contract with extra money for completing a job early. This can be used effectively in other business areas as well such as software development.
1. Make multiple copies. Give one original to each party.
Frequently Asked Questions
What is an acceleration of contract performance agreement?
An acceleration of contract performance agreement is a document where the owner and contractor agree to complete work earlier than originally scheduled. The contractor agrees to finish by a new date in exchange for an additional payment from the owner. This agreement is used when the owner desires the work to be substantially complete sooner than the original contract provided.
What does 'time is of the essence' mean in a construction contract?
In this agreement, 'time is of the essence' means that the completion date is critical and failure to meet it will result in damages. The parties acknowledge that if the work is not completed within the time set forth, the owner shall suffer damages that are difficult to calculate. This clause reinforces the importance of timely performance.
What are liquidated damages in an acceleration agreement?
Liquidated damages are a predetermined sum that the contractor agrees to pay the owner for each day or period beyond the deadline that the work remains incomplete. The agreement specifies that these damages are solely as liquidated damages and not as a penalty. The amount is stated as a specific dollar sum per defined period.
How is the contractor compensated for accelerating the work?
The contractor receives an additional payment, as specified in the agreement, in consideration for agreeing to complete the work by the accelerated date. The exact amount and due date are filled in the blanks of the agreement. This payment is separate from the original contract price.
What happens if the contractor fails to meet the accelerated completion date?
If the work is not completed within the time set forth in the agreement, the contractor shall pay the owner liquidated damages. The agreement states that the owner shall suffer damages that are difficult to calculate, and the liquidated damages are the agreed remedy. The specific amount per period is stated in the agreement.
Is the additional payment due before or after the accelerated completion?
The agreement states that the additional payment is due on or before a specified date, which is filled in the blank. This date may be before the accelerated completion date or upon it, depending on what the parties negotiate. The payment is made in consideration of the contractor's agreement to complete the work by the accelerated date.
Can an acceleration agreement modify the original contract's completion date?
Yes, the acceleration agreement modifies the original contract by setting a new substantial completion date. The contractor agrees to complete all work in accordance with the plans and specifications of the original contract by the new date. The original contract's completion date is replaced by the accelerated date for the purpose of this agreement.
What details need to be filled in an acceleration of contract performance form?
The form requires the names of the contractor and owner, a description of the agreement, the original agreement date, the original substantial completion date, the new desired substantial completion date, the additional payment amount and due date, and the liquidated damages amount and period. These blanks allow the parties to customize the agreement to their specific situation.
Why would an owner want to accelerate contract performance?
An owner may desire that the work be substantially complete earlier than originally scheduled for various reasons, such as business needs or other deadlines. The agreement states that the owner desires the work to be substantially complete on or before a specified date. By offering additional payment, the owner incentivizes the contractor to finish sooner.
Are liquidated damages enforceable in an acceleration agreement?
The agreement specifies that the liquidated damages are solely as liquidated damages and not as a penalty, which is a key factor in enforceability. The parties agree that the owner shall suffer damages that are difficult to calculate if the work is not completed on time. This language is intended to support the enforceability of the liquidated damages provision.
