Section 12.8 Liquidated Damages
Library | Construction Law 2016 Supp |
B. (§12.8) Liquidated Damages
A short discussion of liquidated damages is prudent here because liquidated damages are frequently intertwined with excusable delays. Whether an owner is due liquidated damages under the contract often turns on whether the contractor was justified in failing to complete the project by its scheduled completion date.
Liquidated damages provisions are generally enforceable unless they are deemed a “penalty” rather than an estimation of the damages an owner will face if the project is not completed on time. See generally 25 C.J.S. Damages §§ 175–195 (2002). Courts have shied away from enforcing any clause they deem a penalty because penalties are generally viewed as counterproductive to the contracting process and abhorrent to the fair compensation purpose of contractual remedies jurisprudence.
Instead, if an owner can show that the damages for late completion were impossible, or at least very difficult, to accurately estimate at the time of execution of the contract, and if the amount set is determined to be a reasonable forecast of just compensation for...
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- Section 12.1 Introduction
- Section 12.2 Additional Time—First Battle in the Delay War
- Section 12.3 Excusable Delays
- Section 12.4 Defined by the Contract?
- Section 12.5 Effects of Foreseeability and Owner’s Conduct on Excusable Delays
- Section 12.6 Foreseeability
- Section 12.7 Hindrance by Owner
- Section 12.8 Liquidated Damages
- Section 12.9 Notice Requirements
- Section 12.10 Role of Architect’s Decision on Extension Requests
- Section 12.11 Damages for Compensable Delays
- Section 12.12 No Damage for Delay Clauses
- Section 12.13 Delays Not Contemplated by the Parties
- Section 12.14 Delay Amounts to an Abandonment
- Section 12.15 Delay Was Caused by Bad Faith or Fraud
- Section 12.16 Active Interference by Owner
- Section 12.17 No Damage for Delay Clauses in Subcontracts
- Section 12.18 General Concepts
- Section 12.19 Total Cost Method
- Section 12.20 Modified Total Cost Method
- Section 12.21 Jury Verdict Method
- Section 12.22 General Conditions
- Section 12.23 Extended Home Office Overhead
- Section 12.24 Proving the Fact of Damage: Extended and Unabsorbed Home Office Overhead
- Section 12.25 Computing Unabsorbed General Overhead Costs Attributable to Delay
- Section 12.26 Equipment Costs
- Section 12.27 Interest
- Section 12.28 Jointly Caused or Concurrent Delays
- Section 12.29 Early Completion Delay
- Section 12.30 Generally
- Section 12.31 Constructive Acceleration
- Section 12.32 Notice of Acceleration
- Section 12.33 Disruptions and Change Orders
- Section 12.34 Practice Pointers
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