Before you accept $2,000 a day in liquidated damages, check this first

Start with the contract

When the builder starts deducting $2,000 a day, do not begin with the argument. Start with the contract. Find the clause that sets the daily rate, the completion date, the extension-of-time process, and any set-off or notice wording. If any of those pieces are missing or unclear, you need to slow down before you accept the deduction. ([business.gov.au](https://business.gov.au/people/contractors/prepare-a-contract?utm_source=openai))

Business.gov.au says building and construction contracts should check the relevant state or territory rules for variations, and that variations are best put in writing and signed by both sides. That matters here because time changes, extra work and delay approvals often sit inside the same paper trail as the payment dispute. ([business.gov.au](https://business.gov.au/people/contractors/prepare-a-contract?utm_source=openai))

Match the delay notices

Pull every delay notice, email, site instruction and diary note into date order. Then mark when you first warned of the delay, what caused it, and whether you asked for more time before the job slipped further. A short chronology is often more useful than a long, angry explanation here. ([business.gov.au](https://business.gov.au/people/contractors/prepare-a-contract?utm_source=openai))

Check the builder's replies as carefully as your own notices. If they ignored the claim, pushed it aside, or changed position later, that becomes part of the story. Business.gov.au recommends written notice and prompt discussion in dispute clauses, which is why an email trail is usually stronger than memory alone. ([business.gov.au](https://business.gov.au/people/contractors/prepare-a-contract?utm_source=openai))

Source: Official guidance

Rebuild the real delay story

Build the real cause of delay from the records, not from the loudest version of events. Site diaries, photos, delivery dockets, weather notes and messages from other trades can show whether the job was waiting on access, late materials, design changes or someone else's sequencing mistake on site at the time. ([business.gov.au](https://business.gov.au/people/contractors/prepare-a-contract?utm_source=openai))

If the delay flowed from a change in scope, treat it as both a timing issue and a variation issue. Business.gov.au notes that variations can affect price and the ability to complete the work on time, so your file should show what changed, who asked for it, and whether anyone agreed a new date. ([business.gov.au](https://business.gov.au/people/contractors/prepare-a-contract?utm_source=openai))

Answer every deduction in writing

Reply to each deduction in writing, not just the newest one. Set out the amount taken, the invoice it came from, the clause relied on, and why you say the figure is wrong or overstated. Ask the builder to identify the exact breach and the period they say caused the loss. ([business.gov.au](https://business.gov.au/people/contractors/prepare-a-contract?utm_source=openai))

Keep the tone firm and factual. If you are open to a revised program or a compromise, say so, but do not admit liability unless you mean it. Business.gov.au recommends written notice and early discussion in dispute clauses, so a short clear letter is usually better than a rushed phone call. ([business.gov.au](https://business.gov.au/people/contractors/prepare-a-contract?utm_source=openai))

Keep cash protected while the job continues

Before you keep working, decide whether the deduction is eating too much of your cash margin. One deduction may be manageable. A series of them can turn a live contract into a funding problem fast, especially if the builder keeps making the same argument on every progress claim. ([business.gov.au](https://business.gov.au/people/contractors/prepare-a-contract?utm_source=openai))

Get the file ready now, while the job is still moving. Include the contract, notices, site diary extracts, emails, invoices and every deduction. If you want help turning that paper trail into a practical dispute response, call CRP today about dispute resolution. CRP coordinates independent qualified professionals and can help you take the next step. ([business.gov.au](https://business.gov.au/people/contractors/prepare-a-contract?utm_source=openai))