Jensen Jr, D A and Craig Jr, J W (1998) Testing the validity of liquidated damages clauses: Measuring the application preference and consistency of the intent test as applied by the United States court system. Construction Management and Economics, 16(3), pp. 269-281. ISSN 01446193
Abstract
Although the general principles for ascertaining the validity of a liquidated damages clause are well understood, the courts seem inconsistent in their interpretation of whether a clause is valid or not. Judicial opinions dating from 1858 to 1991 formalize the study population. Retrieval of judicial opinions are from official and unofficial legal reporters for the United States. Of the 223 selected appellate court cases, 175 met the population parameters. Data derived from these judicial opinions were tested statistically by: (a) the chisquare test for binomial data, and (b) the Stuart-Cox sign test for trend analysis. The chi-square tests reveal that, at present, the courts demonstrate a preferred pattern of movement away from applying the intent test when construing the validity of a liquidated damages clause. Based on the Stuart-Cox sign test, however, the current pattern of application preference does not display the presence of a statistical trend for future application preference. Additionally, when the courts do apply the intent test, the application preference is at the time of contract formation. Further, there is no statistical trend that indicates that this will be the preferred application in the future.
| Item Type: | Article |
|---|---|
| Uncontrolled Keywords: | construction contracts; intent test; liquidated damages clause; nonexcusable delay; penalty clause |
| Index terms: | preference, population, liquidated damages, United States, movement, penalty, testing, contract formation, presence, construction contract, validity |
| Subjects: | evaluation and assessment methods, contract type, health behaviours and lifestyles, contract formation, environmental science, professional practice, decision-making and reasoning, contractual remedy, Geography, demography, regulatory law |
| Topics: | Procurement, Sustainability, Research Practice, Geographical Context, Engineering Principles, Contract Administration, Legal Issues, Urban Studies |
| Descriptive scope: | 3 PCA |
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