The use of liquidated damages as a sole remedy for contractor delay is a well-established mechanism in the construction industry. It is designed to provide certainty for both employer and contractor in relation to the financial effects of the contractor’s culpable delay. The employer does not need to prove its loss caused by the contractor’s late completion, and the contractor knows the exact financial implications of its own actions, therefore giving both sides the certainty that they require in this scenario. Unfortunately, for a period of time recently, the Court of Appeal threw the liquidated damages mechanism into some considerable doubt in circumstances where the Contractor’s employment under the contract has been terminated.
This is exclusive to our members. Login to unlock more details.
