Liquidated Damages in Construction Contracts (CCLD41F)

Liquidated Damage Clauses: Meaning, Purpose and Enforceability

Few provisions in construction contracts give rise to as much misinformation as liquidated damages clauses. Many upon many engineers, owner representatives, and contractors attest to have a firm understanding of when liquidated damages can be imposed and when they cannot; the problem is their understanding is more often than not incorrect.

This webinar by Zach Jones will help you understand that liquidated damages have a valid purpose. When that purpose is served, a liquidated damages clause can usually be enforced. Often, however, liquidated damages either start out or end up as nothing more than a penalty for finishing late. When the clause turns in to a penalty, many courts will not enforce it. Thus, the critical question in most jurisdictions is whether the liquidated damages represent an agreed upon scheme to compensate the owner for damages which are difficult to measure or whether it simply represents a fortuitous penalty for the owner.

In this program, you will learn:

• The valid purpose for including a liquidated damage provision in construction contracts
• How courts view liquidated damages clauses (spoiler alert: why courts look for reasons to not enforce liquidated damages)
• The common test used to determine if imposing liquidated damages is appropriate
• Some variations on that test
• Several examples of liquidated damages clauses in construction contracts that courts have analyzed and found to either be enforceable or not

Benefits of the session

• Gain a better understanding of liquidated damage clauses
• Learn how to recognize a liquidated damage clause which is more likely to be enforceable (and which ones are not)
• You will be better equipped to negotiate delay and late finish issues on projects by understanding how much (or little) ammunition the liquidated damage clause in the contract really is

Who should attend

• Contract owners and principals
• CFOs and controllers for contractors, developers, architects, engineers, or owners
• Project managers
• Project engineers
• Estimators and business development professionals
• Consultants who work with contractors, developers, architects, engineers, or owners

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