Presumption : Subcontractor has contractual obligation to finish within a timescale and is in breach of the obligation if he completes late.
Where a subcontractor is in breach he will have a liability to pay damages to the main contractor.
The injured party is entitled to recover any loss likely to arise in the usual course of things from the breach, plus such other loss as was in the contemplation of the parties at the time the contract was made and which is likely to result from the breach.
The main contractor, as injured party, is entitled to levy a claim for damages against a subcontractor who completes late. These damages will include any liability the main contractor has to pay liquidated damages to the employer which result from the delay. This will apply irrespective of the value of the subcontract work.
It is open to the subcontractor to argue, if the main contract liquidated damages are extremely high, that the sum involved was outside his contemplation at the time the contract was entered into. To forestall this type of argument main contractors, usually with the tender enquiry documents will set out details of the main contract (including the sum included for liquidated damages).
Where the subcontractor is nominated and the main contract provides for an extension of time where work is delayed by the subcontractor no claim from the employer for liquidated damages will arise provided that the contractor has properly claimed the extension of time.
Relevant cases:
1. Hadley v. Baxendale (1854)
2. Victoria Laundry (Windsor) Ltd v. Newman Industries (1949)
3. M.J. Gleeson plc v. taylor Woodrow Construction Ltd (1989)
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