Liquidated damages in construction contracts—practical tips


Published by a ³ÉÈËÓ°Òô Construction expert
Checklists

Liquidated damages in construction contracts—practical tips


Published by a ³ÉÈËÓ°Òô Construction expert

Checklists
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This Checklist sets out drafting tips to take into account when drafting or negotiating liquidated damages (LADs) provisions in a building contract. It sets out practical tips and guidance intended to help ensure that LADs provisions in a building contract will be enforceable.

The parties must:

  1. •

    ensure that the building contract makes specific provision for the payment/deduction of LADs in the event of delay

  2. •

    retain any correspondence concerning the relevant clause(s) of the building contract, as it will be admissible as evidence of the reasons for the drafting of the liquidated damages clause and the level of LADs set by the contract

  3. •

    ensure that the building contract sets out a trigger date from which LADs will run and provision for this to be re-fixed to allow for any extension of time due to an act of prevention

  4. •

    be able to evidence the steps taken to estimate the loss that would result from late completion—keep a good record of how the LADs figure was calculated, including any negotiations about it between the parties

  5. •

    reach agreement,

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Jurisdiction(s):
United Kingdom

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