Sie sind auf Seite 1von 2

Having read the sources, how should LADs be able to help?

How does a contractor need to ensure


that all aspects are covered in the contract?

Liquidated damages provisions are commonly used in construction contracts in the United
States. Liquidated damages represent an amount of money that the contracting parties agree is
an appropriate estimate of the damages a party will sustain if the contract is breached. In
construction contracts, liquidated damages most commonly apply when the contractor breaches
the contract by not completing the work on time. A formula is generally employed to compute
how much a contractor owes for failing to complete on time.

Liquidated Damages are pre-determined damages mentioned in the


construction contract agreement which both parties to the contract agree as
the amount to recover if the contract is breached. Usually Liquidated
Damages are recovered by the Employer if the contractor fails to
substantially complete the work within the stipulated time for completion
It is a pre-determined amount to cover the possible loss that Employer has
to face if the contractor doesn’t complete his work within the time for
completion stated in the construction contract. Both contractor and
employer knows the amount of Liquidated damages per day or per week if
the work is not completed substantially. By signing the contract agreement,
contractor agrees on the amount of Liquidated Damages that Employer can
recover if the contractor fails to deliver the project within the Time for
Completion.
If the contractor fails to meet the practical completion by the mentioned
project completion date, Employer is entitled to recover the Liquidated
Damages from the contractor. Contractor shall allow the Employer to
recover the liquidated damages calculated at the rate mentioned in the
contract agreement for the period of delay.

However such recovery of Liquidated damages by the employer does not


relieve the contractor from his liabilities and obligations under the contract.
The contractor shall complete the project with accepted quality as per the
contract.

Liquidated damages save both time and money. Although liquidated


damages seems like beneficial for the Employer to recover his loss, this is a
pre-determined rate which both parties agree at the time of signing the
contract. Therefore both contractor and employer do not need to calculate
the loss and damages if the project is delayed by 1 day.
However if the delay of the project is due to a reason that is beyond the
contractor, he can claim EOT. Sometimes these reasons and scenario can
create environment for disputes.

If you are a Main contractor and work with subcontractors to complete the
project, then it is necessary to sign your contract agreement with the sub-
contractor with necessary clauses. In the event that the delay is due to sub
contracted work and if Liquidated Damages are mentioned in your sub-
contractor agreement, then you can recover some part of liquidated
damages from the sub-contractor depending on the project and contractual
situation

https://thecontractsengineer.com/liquidated-damages-in-construction-contracts/

http://www.inhouselawyer.co.uk/wgd_question/do-contracts-commonly-contain-delay-liquidated-
damages-provisions-and-are-these-upheld-by-the-courts/

Das könnte Ihnen auch gefallen