Construction Law/contracts

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Question
Sir, i have a doubt.If FIDIC 1999is used for a project contract in which liquidated clause is included, with the amount of dollar to be paid by contractor for every delayed calender day.however maximum limit for damage is not mentioned. But if the actual damage for the owner is much more than the penalty amount per day calculated to cumulative delayed days, and owner has proof for his damage, what amount will the contractor have to pay as penalty.amount as mentioned in contract? or actual damage?? hope I am clear      sir.thank you very much in advance.

Answer

Thank you for this question.

The purpose of the liquidated damages clause is to make certain for both parties the level of liability attaching to late completion. The risk for the Employer is that if he incurs more cost due to the late completion than he recovers through the LD's provision he cannot claim more. As there is not a limit to the number of days, in theory the contractor will pay the daily rate for the number of days of delay.

The employer may have a claim for other costs via other principles of law; for example if there is a separate breach which incurred costs which are not related to the delay, the Employer may have a right to claim those other costs.



I hope that this assists you.

Kind regards,
John Dowse

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John Dowse

Expertise

Legal; contract interpretation; quantum; delay analysis. Practitioner in arbitration, adjudication and mediation.

Experience

Thirty-three (33) years experience in building and construction, at all levels both within contracting and consulting organisations. Practising arbitrator, adjudicator, and mediator. Faculty approved trainer for the Chartered Institute of Arbitrators. Lecturer on construction contract forms and dispute resolution practices.

Organizations
Chartered Institution of Civil Engineering Surveyors Chartered Institute of Arbitrators Institute of Directors Society of Construction Arbitrators

Publications
Various UK and International construction and legal publications.

Education/Credentials
LLB (Hons), Pg Dip (Legal Practice), MCInstCES MCIArb MIOD Barrister

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