Now, it’s important to note that if a liquidated damages clause constitutes a penalty, it will be deemed void.
For example, the amount of damages stipulated in the contract should be reasonable and not extend far beyond that which would normally compensate the anticipated loss.It should also be noted that in all other cases where the Court quantifies or has to assess damages or loss, the damages are known as unliquidated damages. If you have any questions about the subject of liquidated damages, please leave your question or comments in the comment box below and myself or one of my colleagues will get back to you as soon as we can. A: Simply put, liquidated damages are contract provisions prepared to create contractual incentives for timely completion of a project or task.Liquidated damages are fixed damages (dollar values) in the event that a particular project, milestone, or the development of an overall project, is completed late past a contractually agreed upon deadline.Q: Our firm is the engineer of record on a project providing both engineering and construction management services.
The project is completing significantly behind schedule, and the owner has asked us to evaluate whether to assess liquidated damages pursuant to the contract terms between the owner and the contractor.Our question is twofold: First, can you give us an explanation of exactly what liquidated damages are supposed to cover and mean in the context of a construction project; and second, is a schedule analysis necessary to assess liquidated damages, and do we need to retain an expert?If we need to retain an expert, what should we be looking for?The starting point of liquidated damage calculation is the date specified in the contract.The date is subject to challenge for a variety of reasons, including time extensions and excusable delay.In many cases, delaying only a few days is not that costly, but as time passes, costs increase dramatically.