Liquidated Damages

Liquidated damages (LDs) are a pre-agreed amount payable if a delay occurs. They must be a reasonable estimate of real loss—not a penalty.

When They Show Up

  • Large commercial projects with critical turnover dates.
  • Work that affects occupancy or production downtime.

Negotiation Tips

  • Cap your exposure; exclude weather, long-lead parts, and owner-caused delays.
  • Define notice and cure periods, and allow schedule extensions for approved changes.

Neutral Clause (Example)

If LDs apply, they are exclusive of other delay damages and limited to delays solely caused by Contractor, after written notice and cure, and excluding force majeure, AHJ delays, and approved change-order time extensions.

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