Supreme Court: in construction contracts, the original deadline does not set the default if your conduct tolerated the breaches
If your company has construction, work-execution, or service contracts with agreed deadlines, this judgment affects you directly. The First Chamber of the Supreme Court (Docket No. 40,168-2025, November 5, 2025) established that the principal's tolerance of the contractor's breach generates a tacit extension of the deadline, and that the default does not begin from the original expiration of the contract, but from the moment the principal expresses its will to terminate. The point is no small matter: in the analyzed case, that difference determined the calculation of the entire loss of profits.
What it may mean
A construction contract signed on September 6, 2019 set a deadline of four months, expiring on January 6, 2020. The contractor delivered only 4 of the 6 agreed works. As of November 12, 2021, the works remained unfinished.
The principal sued for resolution of the contract and compensation for damages. The courts upheld the claim and ordered the contractor to pay $12,500,000 for consequential damage, $7,208,994 for loss of profits, and $5,000,000 for moral damage. But the principal was not satisfied: it sought to have the default counted from January 2020 —and not from November 2021— in order to raise the compensation quantum.
The Court rejected that argument. The principal's own behavior for almost two years, accepting progress and keeping the contractual relationship in force, generated a tacit extension of the deadline. Retroactively dating the default to January 2020 would have meant disregarding its own acts. The start date of the default was set on November 12, 2021, when the principal unequivocally expressed its will to dispense with the contractor.
The appellant invoked an infringement of art. 1551 No. 1 of the Civil Code —which regulates default when there is an express deadline— together with other rules on evidence and contractual liability. The Court did not enter into the merits: it determined that the tacit extension was a fact established by the trial judges, outside the scope of cassation, unless an effective violation of the rules regulating evidence was proven. It was not proven.
What you can do
If you are the principal or contracting party in construction or works projects, the most immediate risk is one of evidence and documentation. Tolerating breaches without leaving a written record of reservations, protests, or conditions is equivalent, for judicial purposes, to accepting that the deadline was moved. Communications of deadline extension or reservation of rights are not formalities: they are what allow you to maintain that the default began on the original date and not on a later one.
Does your works team leave a written record every time it accepts progress past the deadline? Request a review of your protocol of reservations and works communications before your conduct sets the default date.
Three concrete actions:
- Review the construction or service contracts in force to verify whether they have clauses that expressly regulate the extension or its waiver. Many contracts are silent on this point, which leaves the determination of the deadline to the conduct of the parties, exactly the scenario of this ruling.
- Implement a documentary-management protocol for breaches: emails, works minutes, reservation letters. If the contractor does not comply and you keep paying, coordinating, or receiving progress without protesting, that conduct may be read as tacit acceptance of a new deadline.
- If you are in an active construction lawsuit and the default was established by the trial court, assess with your lawyer whether the facts underlying that determination were correctly proven. Cassation on this point has a very narrow space, but not a non-existent one: it requires identifying the infringed rule with precision, not just disagreeing with the assessment.
If any of these points raises questions —the extension clauses, the documentary protocol, or an ongoing lawsuit—, a 30-minute diagnostic session is enough to size up your gaps. Schedule here.
If you want to review your construction contracts in light of this ruling or assess the risk in ongoing litigation, schedule your consultation with Cubillos Lama
This content is informational and does not constitute legal advice for a specific case.
Link to the ruling: Supreme Court Docket No. 40,168-2025