Violation of Deadlines and Phasing of Design Works

In accordance with the Civil Code of the Russian Federation, the condition on deadlines for performing design works is mandatory: the contract must specify the start date, the final date, and intermediate stages.

The Urban Planning Code of the Russian Federation establishes the staged nature of preparation of design documentation and the mandatory nature of its expert review.

In state and municipal contracts, deadlines are always classified as essential terms; their modification is possible only in cases expressly provided for by Federal Law No. 44-Federal Law and Federal Law No. 223-Federal Law.

Who bears liability for violation of deadlines and what consequences await the parties to the contract are examined in this article.

Is It Possible to Extend Design Deadlines

Extension of deadlines is possible if there are documented reasons. Typical grounds include:

• failure by the client to provide initial data or technical specifications;
• the need to make changes to the design based on the results of expert review or at the request of the client;
• an increase in the scope of works not originally предусмотрен by the contract;
• force majeure circumstances.

In all cases, execution of an addendum to the contract is required. Unilateral extension of the deadline by the contractor is not permitted. Oral agreements or tacit consent of the client do not release the contractor from liability.

In state contracts, the possibility of modifying deadlines is limited by Article 95 of Federal Law No. 44-Federal Law: extension is allowed only in the event of an increase in the scope of works by no more than 30 percent, delays caused by the fault of the client, or force majeure.

Liability for Delay in Design Works

Delay in preparation of design documentation is classified as a breach of contract. The consequences depend on the terms of the agreement and the nature of the contract (private or state):

1. Penalty

In private contracts, the parties independently determine the rate (for example, 0.1 percent of the contract price for each day of delay).

In state contracts, the amount of late fees is calculated using the formula established by Federal Law No. 44-Federal Law: one three-hundredth of the key rate of the Bank of Russia calculated on the value of the unperformed part of the works for each day of delay. This is a mandatory rule that the client is obliged to apply.

2. Compensation for Damages

The client is entitled to claim damages in excess of the penalty if they can prove their amount and a causal link with the delay. Typical examples include expenses for hiring another designer, downtime of construction contractors due to the absence of documentation, and penalties under an investment contract.

3. Termination of the Contract

If lagging behind the schedule makes completion of the works within the agreed timeframe impossible, the client may withdraw from the contract (Article 715 of the Civil Code of the Russian Federation). This gives the right to engage a new contractor and recover expenses and penalties from the previous one.

Specifics of State Contracts

The client is not entitled to “turn a blind eye” to violations: they are obliged to accrue late fees and, in the event of a material delay, initiate termination. In the case of unilateral termination, information about the contractor is entered into the Register of Unfair Suppliers, which blocks participation in procurement procedures for two years.

Thus, delay entails not only financial losses for the contractor but also serious reputational risks. This is why documentary confirmation of the reasons for the delay and timely formalization of deadline extensions are of key importance.

Liability for Violation of Phasing of Design Works

Stages specified in a design contract have the same legal significance as the final deadline. If the parties have agreed on intermediate deadlines, failure to meet them is regarded as delay in performance of the entire obligation. Therefore, delay of even one stage gives the client the right to claim late fees for each day of delay.

If the lag is material and creates a risk of inability to complete the work on time, the client may withdraw from the contract under Article 715 of the Civil Code of the Russian Federation without waiting for the final date.

Payment in such cases is also linked to the result of the stage: the contractor receives payment only after signing of the acceptance certificate. If the certificate is not signed and the work is not accepted, the contractor is not entitled to demand payment, even if part of the task has in fact been completed.

Specifics of Modifying Deadlines under State Contracts

In state and municipal contracts, deadlines are classified as essential terms. They are fixed in the procurement documentation and in the contract itself and may be modified only in cases expressly provided for by law. The grounds are contained in Article 95 of Federal Law No. 44-Federal Law: an increase in the scope of works by no more than 30 percent, delay in performance caused by the fault of the client, as well as force majeure circumstances.

Any other reasons—for example, the contractor’s desire to extend the deadline due to lack of resources—have no legal force. An attempt to modify deadlines without lawful grounds will be regarded as a violation, and such a contract may be declared invalid.

If a delay nevertheless occurs, the client is obliged to accrue late fees for each day of delay. However, if the amount of the penalty does not exceed 5 percent of the contract price and the work has been completed, the client is obliged to write off the accrued amount. For the contractor, this is an opportunity to avoid disproportionate sanctions for minor schedule disruptions.

In the event of a material delay, the client is entitled to terminate the contract unilaterally and submit information about the contractor to the Register of Unfair Suppliers. For design organizations, this means a two-year ban on participation in procurement procedures and loss of the opportunity to receive new orders.

How to Prove Delay in Design Works Due to the Contractor’s Fault

To recover a penalty or terminate the contract, the client must confirm both the fact of the delay and the contractor’s fault. To do this, a set of evidence should be collected in advance. The basis will be: the contract and the schedule, acceptance certificates (or their absence), correspondence with reminders of deadlines, and documents confirming transfer of initial data. If the contractor claims that the delay was caused by the quality of the documentation, it is recommended to appoint an expert review to confirm the presence of errors and revisions affecting the deadlines.

If the contractor transferred the documentation later than the established deadline or did not submit it at all, the fact of the violation is recorded by a unilateral certificate or an internal memorandum of the client. In a dispute over the causes of the delay, it is the expert review that will show whether the documentation could have been completed on time with normal organization of work.

Before applying to court, it is necessary to send the contractor a written claim with calculation of the penalty and a demand to eliminate the violations. If no response is received within the established period or the demands are not fulfilled, the client prepares a statement of claim and applies to the arbitration court, attaching all collected evidence.

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How to Prove Delay in Design Works Due to the Client’s Fault

It is important for the contractor to record that the delay arose not through their fault, but due to actions or inaction of the client. Most often, disputed situations are related to untimely transfer of initial data, delays in approvals, or payment delays.

As evidence, it is necessary to collect the contract and the terms of reference, letters and notices requesting initial data, minutes of meetings, and confirmations of submission of documentation for approval. If work was suspended due to absence of documents, a notice of suspension of performance should be executed.

If the dispute concerns the quality and deadlines of the documentation, the contractor may petition for an expert review. It can confirm that the delay occurred due to absence of initial materials or untimely assistance from the client.

Before court proceedings, the contractor sends the client a written notice or claim indicating specific obstacles and their consequences for the deadlines. If the situation is not resolved and the client presents unjustified claims for penalties, the contractor must file a claim or a response to the client’s claim, attaching all collected evidence.

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Instruments of the Parties in Case of Delay and Violation of Phasing

Checklist for the Client: How to Prepare a Claim and Calculate Sanctions

1. Check the contract and the schedule: record the dates of completion of works and stages, as well as the terms for accrual of penalties.
2. Record the fact of delay: prepare an internal memorandum, a unilateral certificate, or other written confirmation of absence of results by the established date.
3. Collect evidence: correspondence with the contractor, certificates of transfer of initial data, minutes of meetings, confirmations of payment.
4. Calculate the amount of the penalty:
1. under the terms of the contract (for private contracts);
2. under the formula of Federal Law No. 44-Federal Law — one three-hundredth of the key rate of the Central Bank of Russia calculated on the price of the unperformed part of the works for each day of delay (for state contracts).
5. Prepare a claim: specify the particular violations, the amount of the penalty, and the deadline for voluntary payment.
6. Send the claim to the contractor by registered mail or through an electronic document management system.
7. If no response is received or the demands are not fulfilled, prepare a statement of claim and apply to the arbitration court, attaching all collected evidence.

Checklist for the Contractor: How to Substantiate Extension of Deadlines and Reduce Sanctions

1. Check the contract: verify which documents and initial data the client is obliged to provide, and which stages and deadlines are established.
2. Suspend performance: if work is impossible without the client’s participation, issue a notice of suspension with reference to the relevant provisions of the contract and law.
3. Initiate an addendum: propose to the client an extension of deadlines, indicating specific reasons and justification.
4. Preserve evidence: correspondence, minutes of meetings, certificates of transfer of documentation.
5. When a claim is presented, request reduction of the penalty in court under Article 333 of the Civil Code of the Russian Federation, attaching evidence of absence of fault or disproportionality of sanctions.
6. In the event of a negative expert opinion, correct the design documentation within the established timeframe without additional payment in order to avoid further sanctions.

Legal Support of Disputes

Violation of deadlines in design works almost always leads to a conflict of interests between the client and the contractor.

Lawyers of KDpartners specialize in disputes in the field of design and construction. We:

• conduct legal analysis of the contract and correspondence of the parties;
• assess the legality of claims for penalties and damages;
• prepare claims, objections, and lawsuits;
• support clients in arbitration courts and in settlements with state customers under Federal Law No. 44-Federal Law and Federal Law No. 223-Federal Law;
• achieve reduction or write-off of penalties if they are disproportionate to the consequences of the violation.

Professional protection makes it possible not only to reduce financial losses but also to preserve the reputation of a participant in the construction market.

For matters of legal support, you may contact us through the form on the website or via the indicated contact details.