Delay penalties: what to check before they activate
The delay penalty clause usually sets an amount per day or per week of delay from the contractual milestone, sometimes with a maximum accumulated limit (a percentage of the contract amount). What must be checked in advance, not when the delay is already a fact, is whether the milestone that triggers the penalty is clearly identified, whether there are agreed exemption causes (force majeure, delay attributable to the client or supervising architect) and what timeframe exists to notify those causes and thus stop the accrual of the penalty.
The real risk is not just the penalty itself, but discovering too late that the deadline for claiming an exemption cause has passed. If the contract requires notifying the delay cause within a certain timeframe from when it occurs, and that notification is not made on time, the penalty may be applied even though the cause of the delay was objectively beyond the contractor's control.
Guarantees: what type, what amount and when they are released
The work guarantee may be constituted as a percentage retention of each certificate, as a bank guarantee, or as a combination of both, and its amount and form must be explicit in the contract. What it is advisable to review and escalate if unclear: the exact milestone that releases each tranche of the guarantee (provisional acceptance, final acceptance, end of legal guarantee period), and whether there is any provision in the contract that allows the other party to retain the guarantee beyond those milestones without additional justification.
A new work guarantee or renovation work guarantee does not necessarily follow the same scheme in all contracts: the applicable legal guarantee period and additional contractual guarantees agreed may overlap or not, and that difference must be resolved in the contract, not assumed by analogy with another prior work.
Liability insurance: what coverage to verify
The contract usually requires a current liability insurance policy with a minimum coverage amount, and sometimes requires the client or promoter to be named as an additional insured or beneficiary. Verifying this is not an administrative formality: an expired policy, with insufficient coverage for the actual scope of the work, or that does not cover the specific risk of the project (for example, work at height, or proximity to third-party structures) leaves the contractor exposed precisely when that coverage would be most needed.
Liability on a work site may be divided among several agents, contractor, subcontractors, supervising architect, and the contract should make clear what each policy covers and where another agent's responsibility begins. When that delineation is not clear in the contract, it is exactly the kind of matter that must be escalated to legal counsel before an incident occurs, not after.
How to prioritize which risk to escalate first
Not all contractual risks identified in an analysis deserve the same urgency. A practical prioritization criterion crosses two variables: the time proximity of the event that triggers the risk (a penalty that begins to accrue in two weeks versus a guarantee that releases in two years) and the magnitude of the potential economic impact if the risk materializes without having been managed.
Matters that combine high proximity and high impact, an upcoming milestone date with associated penalty, a policy about to expire on a work with significant risk, are the ones that must be escalated immediately to whoever has authority to decide, rather than remaining mixed in a general list of pending items together with lower-urgency matters.
How Bloqbase supports identifying contractual risks
Bloqbase allows using the Contract Analysis module to flag where the penalty, guarantee and insurance clauses are located within the contract, and what dates or events trigger them, within the documentary context of the work.
The tool does not replace the legal assessment of these risks or decide whether a coverage is sufficient: its function is to direct human review toward the matters where there is still room for action, so that the decision to escalate to legal counsel is made with complete contractual information and in time.