🇦🇪UAE

غرامات تأخير السداد والتعويضات المقررة (Liquidated Damages & Delay Penalties)

1 verified sources

Definition

Search results confirm liquidated damages are 'commonly included' in UAE construction contracts: 'Construction contracts commonly include liquidated damages clauses. Such liquidated damages clause specifies a predetermined amount or formula.' Typical UAE contract penalties range 0.5–1% of monthly contract value per week of delay. A AED 50M project with a 1% LD rate = AED 500,000 per week. Contractors dispute or negotiate LD claims manually, consuming 20–40 billable hours per dispute. Delays due to material shortage, labor unavailability, or employer-caused obstruction still trigger LD liability, even if contractor is not at fault.

Key Findings

  • Financial Impact: AED 50,000–500,000 per occurrence; typical portfolio exposure: AED 500,000–5,000,000 annually (0.5–1.5% of portfolio revenue).
  • Frequency: 1–3 LD claims per project; 20–30% of large projects incur LD penalties.
  • Root Cause: Unrealistic project schedules, material/labor delays, external obstruction (employer, regulatory delays), manual delay-tracking workflows, poor critical-path visibility.

Why This Matters

This pain point represents a significant opportunity for B2B solutions targeting Nonresidential Building Construction.

Affected Stakeholders

Project Managers, Contract Managers, Finance teams, Legal/Compliance

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Financial Impact

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Current Workarounds

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Methodology & Sources

Data collected via OSINT from regulatory filings, industry audits, and verified case studies.

Evidence Sources:

Related Business Risks

تأخر السداد والدفع المؤجل (Payment Delays & Back-to-Back Payment Issues)

AED 50,000–500,000 per project (estimated 2–4% of contract value for projects >AED 5M); typical working capital drag of AED 150,000–300,000 per 30-day delay.

تجاوز التكاليف والزحف النطاق (Cost Overrun & Scope Creep)

AED 100,000–1,500,000 per project (3–8% of contract value); typical unrecovered labor/materials: AED 50,000–200,000 per project phase.

فقدان العقود وتأخير التسليم (Lost Deals & Contract Execution Delays)

AED 50,000–500,000 per lost deal; typical portfolio loss: AED 500,000–2,000,000 annually (5–15% of new business pipeline).

أخطاء التفاوض وسوء تخطيط العقود (Negotiation Errors & Poor Contract Planning)

AED 500,000–3,000,000 per contract portfolio annually (3–8% of contract margin); typical hidden cost: AED 50,000–300,000 per unfavorable contract term.

تأخير الدفع وتحويل الحقوق (Payment Delay & Lien Rights Impedance)

Estimated: 5–15 additional AR days per project cycle; working capital impact 2–4% of monthly cash flow (typical for AED 50M+ projects: AED 3–6M working capital drag per cycle)

عدم الامتثال للقانون الجديد (Non-Compliance with New Construction Regulation)

Estimated: AED 5,000–25,000 per non-compliant project contract; legal remediation cost AED 10,000–50,000 per dispute; potential project halts (cost: AED 50,000–200,000+ per month in idle time)

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