Randolph Thomas, H; Smith, G R and Cummings, D J (1995) Enforcement of liquidated damages. Journal of Construction Engineering and Management, 121(4), pp. 459-463. ISSN 0733-9364
Abstract
This paper reviews the rules related to the enforcement of the contract liquidated-damages clause. The literature indicates that the clause will be enforced if: (1) The daily amount bears some resemblance to the actual damages that could be reasonably foreseen at the time the contract was written; and (2) the damage amount is difficult or impossible to estimate. Related to the reasonableness issue, courts will not permit the owner to use the clause to unreasonably coerce the contractor to complete the project on time or punish the contractor if he or she is late. The issue of difficulty in estimating the potential damages seems to be relatively minor. It is important that the estimates be related to the time the contract was signed. A number of cases were found where the actual damages were considerably more or less than the liquidated amount. This fact did not serve to waive enforcement of the clause. This paper discusses a number of issues related to liquidated damages and the assistance of an attorney may be needed.
| Item Type: | Article |
|---|---|
| Index terms: | owner, estimate, enforcement, liquidated damages, damages, estimating |
| Subjects: | sociology, contractual remedy, health safety and environment, financial and cost management, dispute resolution |
| Topics: | Contract Administration, Legal Issues, Stakeholder Management, Health and Safety, Cost Management |
| Descriptive scope: | 2 PC |
N.B. Descriptive scope is a count of how many of the five facets of empirical research are indicated by the words used in title, abstract and keywords. It is not intended as a judgement on the research; merely a count of the kind of word we would expect to indicate Phenomenon, Concepts, Theoretical framing, Empirical techniques, Analytical techniques. If all five are present, then a code of “5 PCTEA” will indicate this. If you feel the coding for this record is questionable, we welcome discussion around the terms we matched or the way we categorized them. The facet you would expect may not be coded, or a facet may be coded inappropriately. This can also bear on a larger question, of which facets should be treated as defining in construction management research. Please get in touch, and we will look at it. More details here