Essential law: Liquidated damages, part one

By James Worthington and Carolyn Davies 2020-11-23T05:00:00

Our series on the basics of construction law moves on to liquidated damages. In the first of four articles, James Worthington and Carolyn Davies look at ways to challenge such clauses

Liquidated and ascertained damages (LADs) are a common mechanism used in construction contracts to fix a predetermined amount that will be payable by one party to the other in the event of a specified breach.

They are commonly payable by the contractor where the works have not been completed by a specified date or where the performance of the works does not achieve specified criteria. LADs usually operate as an exhaustive remedy thereby excluding any claims for general damages, although this is subject to the wording of the particular contract.

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