Completion Date or Earlier by Agreement: What Does it Mean and Why is it Important?
When it comes to contracts, particularly in the field of construction and real estate, the phrase « completion date or earlier by agreement » is often used. But what exactly does it mean, and why is it important to both parties involved in the contract?
Firstly, let`s define the term. A completion date refers to the deadline by which the project or construction work must be completed, and failure to meet this date could result in financial consequences, such as the imposition of penalties or liquidated damages. « Earlier by agreement » means that the work can be completed before the completion date if both parties agree to do so.
Now, why is this important? For the party commissioning the work, such as the owner of a property, having a completion date provides a measure of protection against delays and ensures that the project is completed within a reasonable timeframe. It also allows them to plan for the future, such as making arrangements for tenants or scheduling moving dates.
On the other hand, for the contractor, having the option to complete the work earlier than the completion date by mutual agreement can be beneficial as it provides them with greater flexibility in managing their workload and resources. It also creates an opportunity to showcase their efficiency and professionalism to the client, potentially strengthening their reputation and leading to future business opportunities.
However, it`s important to note that any agreement to complete the work earlier than the completion date must be entered into with caution. Both parties should clearly understand their respective obligations and responsibilities, and any additional costs incurred as a result of early completion, such as overtime or additional labor, should be clearly outlined and agreed upon.
In addition, the contract should provide for the possibility of early completion, including provisions for a revised completion date, and any changes to the schedule should be communicated in writing to avoid misunderstandings and disputes.
To summarize, the phrase « completion date or earlier by agreement » is an important element of contracts in the construction and real estate industries. It provides a measure of certainty and protection for both parties, and the option to complete the work earlier than the deadline can benefit both contractors and owners. However, any agreement to do so must be approached with caution and require clear communication and understanding of obligations and costs.
