Common use of PENALTY FOR DELAY Clause in Contracts

PENALTY FOR DELAY. The time allowed for carrying out the work as entered in the contract shall be strictly observed by the contractor and shall be reckoned from the date on which order to commence work is given to the contractor. The work shall throughout the stipulated period of the contract be preceded with all due diligence (time being deemed to be the essence of the contract on the part of the contract) and the contractor shall pay as penalty as under: - Penalty equal to one half percent per week subjected to maximum of 10 % of balance work of respective month on the pro-rata cost of balance connections. The penalty shall be calculated in proportionate to the total cost of work order and no of connections allotted and will be imposed on balance connection for respective month. However, after full completion period, the contractor shall pay as penalty equal to an amount of one half percent of actual cost of work order (Standard condition of PSPCL) as shown in contract for every week, if the work remains unfinished after the contract completion period but the entire amount of penalty to be paid under the provision of this clause shall not exceed 10% of the actual total cost of the work order which will include the estimated cost of the balance work left out. However, the penalty deducted due to noncompliance of monthly progress, the same shall be adjusted during the final computation of penalty. This clause will be made applicable phase wise by considering contract value of each phase separately.