Legal Consequences of Construction Project Delays in Indonesia: A Normative Analysis of Breach, Liability, and Dispute Resolution

Abstract

Construction delays are a recurring problem in the implementation of construction contracts and may disrupt cost, schedule, and the intended benefits of a project. Existing studies cited in this article predominantly examine the causes and performance impacts of delays, while legal discussions tend to address default, liability, or dispute resolution separately. This study therefore examines how Indonesian law qualifies construction delays, allocates responsibility among the parties, determines their legal consequences, and provides mechanisms for resolving resulting disputes. The research employs normative legal research using statutory and conceptual approaches. Primary legal materials comprise the Civil Code, Law Number 2 of 2017 concerning Construction Services, Government Regulation Number 22 of 2020, and relevant contractual provisions, supported by secondary legal literature and prior studies. The analysis shows that a delay does not automatically constitute a breach of contract; its legal characterization depends on its cause, contractual risk allocation, and whether the delay is excusable, non-excusable, compensable, or concurrent. Contractor-caused delays may trigger penalties, damages, termination, and performance-bond encashment, whereas owner-caused or excusable delays may justify extensions of time and, where legally and contractually supported, compensation. The study contributes an integrated legal framework linking delay classification to liability and dispute resolution, emphasizing clearer contractual mechanisms for notice, evidence, time extensions, and allocation of delay risk.