How the penalty is worked out
Penalties (JBCC), delay damages (NEC X7, FIDIC) or penalties for delay (GCC) run per calendar day from the day after the due completion date until practical completion. Most contracts cap them, often at a percentage of the contract sum.
An extension of time moves the due completion date. Every day granted takes a day of penalty away, which is why the notice deadline matters.
Worked example
Completion was due on 1 October 2026, the forecast is 30 December, the penalty is R10 000 a day and the cap is 5% of a R10 million contract sum. That is 90 days, R900 000 before the cap, and R500 000 after it. The cap is reached on day 50.