Under a JBCC building contract, a late contractor is liable for the penalty written into the contract. That is a stipulated amount for every calendar day the works run past the date for practical completion. If nobody wrote that amount down at appointment, there is no daily figure to deduct.
The penalties vs liquidated damages argument in construction matters less in South Africa than it sounds. The JBCC calls the daily amount a penalty, and South African law treats the two labels the same way. Its statute on these clauses covers a stipulation made "either by way of a penalty or as liquidated damages", and calls the sum a penalty either way.
What decides your money is whether the number was filled in, and whether the date it runs from is the right one.
What does the JBCC say a late contractor owes?
The JBCC says the penalty is the stipulated amount per calendar day, payable where the applicable date for practical completion has not been met. That is how Sanjee Maharaj, an attorney who presented a JBCC course to electrical contractors in August 2026, puts it in a training note for ECA(SA) on the Principal Building Agreement, edition 6.2. The clause wording quoted below is from the June 2024 print of that edition.
Three words in that sentence carry the weight.
- Stipulated. The amount is agreed in advance and written into the contract. It is not worked out afterwards from what the delay cost you.
- Calendar. The clause counts calendar days, not working days. A 30-day overrun past the applicable date is 30 days of penalty.
- Applicable. The agreement's own definition of penalty spells this out: the date or the revised date for practical completion, "whichever is the later". A revised date is one granted under clause 23, so it is not always the date in the original programme.
Maharaj tells contractors to find two provisions straight away: the date for practical completion and the penalty provisions. Clients should find the same two.
The number lives in the Contract Data
The JBCC Principal Building Agreement defines the Contract Data as "the document listing the project specific information". The date and the daily amount belong there. Maharaj's advice is not to treat it as an administrative exercise, and to read it at a table with a pen before initialling a page.
On the client side the failure is easy to picture: the client signs the last page and the daily amount is blank, or is a round number nobody tested.
The arithmetic is simple once the number exists. Take an illustrative penalty of R3 000 per calendar day and a finish 45 days after the applicable date. That comes to R135 000. With the field left blank, the same job produces nothing by this route, however late it runs.
A useful way to set the figure is to cost one week of delay in your own terms. Rent on premises you cannot occupy, a tenant's lost trading days, holding costs on a unit you cannot transfer. Divide by seven. That ties the figure to real prejudice, which is what a court weighs if the amount is ever challenged.
Penalties vs liquidated damages under South African law
South African law does not strike a penalty clause out simply because it is a penalty. Section 1 of the Conventional Penalties Act 15 of 1962 makes a penalty stipulation enforceable in any competent court, subject to the rest of the Act.
The court's one power over the amount is in section 3. A court may reduce a penalty that is out of proportion to the prejudice the employer suffered, to whatever extent it considers equitable. In judging that prejudice it must consider every rightful interest affected, not only the employer's proprietary interest. The Act provides for reduction, not increase.
Under section 2, a client cannot recover both the penalty and damages for the same delay. Nor can it claim damages instead of the penalty, unless the contract expressly allows it. So where a penalty is filled in, it is usually the client's whole remedy for that delay.
A daily amount set far above any plausible loss invites a section 3 argument for reduction. A blank one is not a free option either. Without an agreed penalty the client is left to a common law claim for its actual proven loss, which means proving the loss item by item. The JBCC's own advisory note on clause 24 says a penalty saves the employer the time and expense of a claim for general damages.
Where the penalty stops
The penalty runs to practical completion, not to the last snag. Clause 24 of the Principal Building Agreement runs it from the later of the date for practical completion and the revised date. It runs up to the actual or deemed date of practical completion, or the date of termination if that comes first.
Under the JBCC definitions, practical completion is the stage, certified by the principal agent, at which the works can be used for their intended purpose and are free of patent defects. The exception is minor defects identified in the list for completion. Final completion comes later, when the works are complete and free of defects.
So once practical completion is certified or deemed, a job that still carries a defects list is not accruing penalty. Those defects are dealt with through the list for completion and the defects liability period under clause 21. The contractor's security under clause 11 is one of two options. One is a 10% guarantee kept valid until the final payment certificate. The other is a 5% guarantee that only runs to practical completion, plus a payment reduction that works like retention until the final payment certificate.
The penalty is also not automatic. Clause 24 has the employer elect to levy it and give the contractor notice, after which the principal agent includes it in the interim payment certificates.
One more limit catches clients out. Under clause 6.1 the principal agent has no authority to amend the agreement, and clause 17.5 gives oral instructions no force or effect. A verbal "take another week" on site is not a revised date.
How a deduction shows up on the money is covered in getting paid on a construction contract, and the rest of the contract law we track is on the law resources page.
Who notices the blank field?
Often nobody, until the job is late. A contractor has no reason to point out a blank penalty line, a principal agent may assume the client filled it in, and clients tend to assume the standard form covers it.
Arabella Infrastructure Solutions is a Johannesburg-based building maintenance and construction company that introduces a client to a contractor already verified for the job, and stays accountable for that introduction through the job. The client has a single point of contact through to handover, so there is one person to ask what the penalty line says before work starts. More on how that works is on the client page.
On Monday
Open the signed agreement for your current job and find the Contract Data. Write down two things: the date for practical completion and the daily penalty amount.
If either is blank, ask the principal agent in writing today what applies. If the job has not started, do not sign until both are filled in, and until the daily figure matches what a week of delay would actually cost you, divided by seven.
