8. Liquidated/Delay Damages

  1. Roger Knowles FRICS, FCIArb, FQSi, Barrister

Published Online: 14 FEB 2012

DOI: 10.1002/9781118257050.ch8

200 Contractual Problems and their Solutions, Third Edition

200 Contractual Problems and their Solutions, Third Edition

How to Cite

Knowles, R. (2012) Liquidated/Delay Damages, in 200 Contractual Problems and their Solutions, Third Edition, Wiley-Blackwell, Oxford, UK. doi: 10.1002/9781118257050.ch8

Publication History

  1. Published Online: 14 FEB 2012
  2. Published Print: 15 FEB 2012

ISBN Information

Print ISBN: 9780470658314

Online ISBN: 9781118257050

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Keywords:

  • liquidated/delay damages;
  • differences, and penalty;
  • liquidated damages, enforceable;
  • pre-estimate of losses to employer;
  • covenanted pre-estimate of loss;
  • JCT 2011 and ICE 7th Edition;
  • employers, JCT 2011;
  • subcontractor breach, paying up the loss;
  • problems, with liquidated damages

Summary

This chapter contains sections titled:

  • What is the difference between liquidated damages and a penalty?

  • If the employer suffers no loss as a result of a contractor's delay to completion, is he still entitled to deduct liquidated damages?

  • If a delay is caused by the employer for which there is no specific entitlement to an extension of time expressed in the extension of time clause, will this result in the employer losing his right to levy liquidated damages?

  • Are liquidated damages which are calculated using a formula or based upon a percentage of the contract sum enforceable?

  • If the architect or engineer fails to grant an extension of time within a timescale laid down in the contract, will this prevent the employer from levying liquidated damages?

  • If the contractor delays completion but no effective noncompletion certificate is issued by the architect under a JCT contract, will this mean that the employer loses his right to deduct liquidated damages?

  • Can a subcontractor who finishes late have passed down to him liquidated damages fixed under the main contract which are completely out of proportion to the subcontract value?

  • What is meant by ‘time at large’? How does it affect the employer's entitlement to levy liquidated damages for late completion?

  • Can a contractor challenge the liquidated damages figure included in a contract as being a penalty and unenforceable after the contract is signed? If so, will it be a matter for the employer to prove the figure to be a reasonable pre-estimate of anticipated loss?

  • If liquidated damages to be enforceable must be a reasonable pre-estimate of loss, how can public bodies or organisations financed out of the public purse be capable of suffering loss?

  • If liquidated damages become unenforceable and hence an entitlement to unliquidated damages arises, can the unliquidated damages be greater than the liquidated damages?

  • Where a contract includes a single liquidated damages amount for failing to complete the whole of the works by the completion date, what entitlement does the employer have to claim from the contractor who has failed to complete parts of the work by the milestone dates written into the contract?

  • Is it possible to include in a subcontract an all-embracing sum for liquidated and ascertained damages for delay to completion?

  • Are liquidated damages payable in respect of delays which occur after a contractor's employment has been terminated but before practical completion?

  • What are the problems associated with applying liquidated damages where provision has been made in the contract for sectional completion?

  • Do liquidated damages provide a complete remedy for delays to a contract?