In my latest column for the Daily Journal of Commerce, I look at the concept of liquidated damages – in my experience one of the top five heavily negotiated (and litigated) clauses in a construction contract. Because a project owner’s potential delay damages are often difficult to determine with certainty at the beginning of a project, the parties stipulate what those damages will be in advance through their contract – in other words, they liquidate the amount of the owner’s delay damages. In theory, at least, the benefit of this approach is that it provides both sides with certainty for a risk that is highly uncertain: late delivery. For a few suggestions as to what to include in this important risk-shifting clause, please read the column here.
Originally published as an Op-Ed by the Oregon Daily Journal of Commerce on September 17, 2020.