1. An owner can reinforce the completion date of a construction project through a liquidated damages provision, which includes a daily monetary rate for each day of delay.
2. The provision is designed to reasonably compensate the owner for delay to the completion date, and is easier to prove than actual damages.
3. The provision can be negotiated and crafted in various ways to ensure equity, such as by being based on project phases or milestones, including a grace period, or capping the exposure. 1. Construction contracts often include a mutual waiver of consequential damages provision, which can prevent parties from recovering certain types of damages, such as loss of use or increased financing costs.
2. Without a liquidated damages provision and with a mutual waiver of consequential damages provision, an owner may have difficulty recovering delay damages for a delayed project.
3. Contractors may have legitimate reasons for delays, such as excusable compensable delay or concurrent delay, which may affect their liability for liquidated damages. – Contractors should ensure that liquidated damages provisions flow the risk downstream to trades that may cause delays.
– Trades should be willing to assume the risk of liquidated damages, and the contractor must ensure that the risk is transferred to them.
– Liquidated damages provisions are common and reasonable, and they emphasize the importance of meeting project deadlines.
https://www.kirwinnorris.com/time-is-money-in-construction-and-this-is-why-there-is-a-liquidated-damages-provision/
Leave a Reply