Liquidated Damages on a Pool Contract in Australia

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On a Queensland contract of $20,000 or more, liquidated damages are contractual payments compensating you for extra costs or losses you are likely to incur if the contractor fails to finish within the contracted time, after allowing for legitimate extensions. The QBCC tells owners to set an amount and record it in the contract.

The short answer

The QBCC's instruction to owners is direct: “Carefully consider what, if any, LD amount is appropriate for your project and ensure it is recorded in the contract.”
They are compensation, not a penalty. The amount should reflect costs you would genuinely incur — the QBCC's own example is extra rental costs.
They only bite after allowing for legitimate extensions of time. An approved extension moves the finish date, and the clock with it.
The date they are measured from comes from your commencement notice plus every extension you have approved in writing — not the date you were told at the sale.
A contract with no LD clause is the normal state of a pool contract. That is exactly why asking for one before signing is worth doing.

What you can and cannot recover for a late pool, by what you did beforehand
What is in your contract	Pool finishes 10 weeks late	What you can realistically claim
No completion date at all	No date was breached	Nothing — there is no benchmark to be late against
A completion date, no LD clause	Date breached	General damages in principle, but you must prove actual loss, item by item
A completion date and an LD clause	Date breached	The stated rate per week, without having to prove each loss
LD clause, but you approved 6 weeks of extensions	Effectively 4 weeks late	LDs on the 4 weeks only
LD clause, delay caused by your own variation	Extension is legitimate	Nothing for that period
LD clause set at an implausible figure	Date breached	A rate untethered from real loss risks being unenforceable — set it to real costs

What liquidated damages are, in the regulator's words

The QBCC's definition in the Consumer Building Guide is compact and every part of it matters:

“LDs are contractual payments to compensate a home owner for extra costs/losses they are likely to incur (e.g. extra rental costs) if the contractor fails to complete the work within the time allowed for in the contract (after allowing for legitimate extensions of time).”

Compensate is the key word. Liquidated damages are not a fine for being late and they are not a bonus for the owner. They are an agreed, pre-estimated figure standing in for losses that are genuinely expected, so that neither side has to argue about receipts afterwards. That is their whole practical value: they convert a long argument about proof into a number per week.

The QBCC's example — extra rental costs — is the classic one, but it is not the only real loss. Interest on a construction loan drawn down for a pool you cannot use, a second holiday booked because the pool was not ready, storage of equipment or furniture, or a bridging arrangement on a sale can all be genuine. The test to apply is not “how annoyed will I be” but “what will this actually cost me per week”.

Why almost no pool contract has an LD clause

Because nobody asks, and the party drafting the contract has no reason to volunteer one.

A liquidated damages clause is unusual among consumer protections in that it is not automatic. Deposit caps apply whether or not you know about them. Statutory warranties are deemed part of the contract even if it does not mention them. Liquidated damages are different: they exist only if they are written in, which is precisely why the QBCC phrases its guidance as an instruction to the owner rather than an obligation on the builder.

It follows that the clause is available at exactly one moment — before signature — and is unavailable at every other moment, including the one at which you discover you wanted it. There is no mechanism to add liquidated damages to a contract that is already running late.

The asymmetry is worth naming plainly: the day it costs nothing to ask is the day you have no reason to think you will need it. That is true of most contract terms, and it is the argument for reading a pool contract properly rather than at the kitchen bench with a pen already in your hand.

How to work out an amount that will hold up

Pick a figure you can justify from real numbers, and keep the arithmetic. Here is the method, with a worked example:

List what a week of delay actually costs you. Not inconvenience — money. Say: $180 a week in interest on the portion of a loan drawn for the pool, plus $60 a week for a club membership you are paying for so the children can swim.
Add them. $240 a week.
Round down, not up. $200 a week. A conservative figure you can evidence is worth more than an aggressive one you cannot, because a rate wildly above genuine loss invites the argument that it is a penalty rather than a pre-estimate.
Ask for it in writing before you sign, expressed as a rate per week or part week, running from the Date for Practical Completion as extended.
Expect a cap. Many builders will agree to a rate but want a ceiling — a total, or a number of weeks. A capped clause is still far better than no clause.

If a builder will not agree to any liquidated damages at all, that is a legitimate commercial position and not a red flag by itself. What is informative is how they say no. “We don't do LDs, but here is our average build time over the last twelve months and here is the extension clause” is a good answer. Discomfort at being asked is an answer too.

Extensions of time come first, always

Liquidated damages never run against the original date. They run against the adjusted date, after every legitimate extension of time.

Queensland sets out when a contractor may seek one — if the owner causes a delay, if the owner approves a variation involving extra work, or if the work is interrupted by more rain than could reasonably have been anticipated. The claim must be in writing, you should not unreasonably reject it, and you should respond promptly in writing. If you approve it, the Date for Practical Completion moves by the period claimed.

So the sum you would actually be claiming looks like this:

(Actual practical completion date) − (Date for Practical Completion on the commencement notice + all approved extensions) = weeks of compensable delay. Multiply by the rate.

Which is why the paperwork matters more than the clause. An LD clause with no commencement notice and no written record of extensions produces an argument, not a payment. Keep all three together. There is more detail on the delay side in what to do when a pool build runs late, and on the start date in the commencement notice.

None of this is legal advice, and a significant claim is worth putting in front of a solicitor. But the part that decides whether you have a claim at all happens before any of that, at the quoting stage — so get quotes from several pool builders and ask each of them the same question about completion dates and liquidated damages.

Common questions

Are liquidated damages standard in a pool contract?

No. Most residential pool contracts contain no liquidated damages clause at all, because the clause only exists where it has been negotiated in. The QBCC Consumer Building Guide v3 tells owners to consider what amount is appropriate and ensure it is recorded in the contract, which is guidance directed at the owner precisely because it is not automatic.

How much should I set liquidated damages at?

At a figure reflecting what a week of delay genuinely costs you — the QBCC's own example is extra rental costs. Work it out from real numbers, keep the arithmetic, and round down rather than up. A rate far above any loss you could evidence risks being treated as a penalty rather than a genuine pre-estimate of damage.

Can I claim liquidated damages if I approved extensions of time?

Only for delay beyond the extended date. Approved extensions move the Date for Practical Completion later by the period claimed, so they reduce or remove the compensable period. If the whole overrun is covered by extensions you approved, there is nothing to claim.

What if my contract has a completion date but no LD clause?

You are not without remedy, but the path is harder. You would be seeking general damages for breach, which means proving your actual loss item by item rather than applying an agreed rate. That is the practical difference a liquidated damages clause makes: it removes the burden of proving each loss.

Do liquidated damages apply outside Queensland?

Liquidated damages are a general contract mechanism and can be negotiated into a building contract anywhere in Australia. What is Queensland-specific is the QBCC's published guidance telling owners to set an amount and record it, and the surrounding machinery of the commencement notice and statutory extension of time rules. Check the equivalent regulator's guidance in your state.

Sources

General information only, current at 2026-09-18. Pool rules differ by state and by council, and penalty amounts are updated regularly. Confirm your own obligations with your council or a registered inspector before acting.

Liquidated damages on a pool contract