Construction Law/LD

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Question
our contract provides Liquidated damages clause. it is an accepted fact that the employer has not suffered any loss due to delay in the completion of the Transmission Line work since the Power station being constructed by the Employer using another contractor was not ready and therefore the Employer could not use the Transmission Line though completed late. in such circumstances can the Employer still impose LD? if the employer suffers loss he does not have to prove the actual loss suffered and impose LD. but if he does not suffer any loss can LD be imposed?

Answer
Dear Hemant,

Thank you for this question.

You have not stated the location of the project or the law governing the project. Under English law and in a lot of other jurisdictions it is clear that where a valid Liquidated Damages provision exists the Employer does not have to prove that it has suffered loss in consequence of late completion. That principle applies also to the situation where the Employer has not suffered any loss at all - it is still entitled to claim liquidated damages from the contractor who is late.


I hope that this assists you.

Kind regards,
John Dowse

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Construction Law

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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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