The glue that holds together a construction project—an undertaking that can be massive, with millions of dollars at stake and the coordination of thousands of people required—is the construction contract, the primary purpose of which is to provide a path for parties to apportion the risk involved in any construction at the front end of a project. One way construction contracts apportion risk is through liquidated damages clauses—a means for the owner and the contractor to agree beforehand to the amount of damages that the contractor will owe to the owner if project completion is delayed. In a column for Daily Journal of Commerce, I break down the liquidated damages clause and provide some suggestions for avoiding the disputes that can arise over its use. Read the full article here.
Originally published by the Daily Journal of Commerce on December 14, 2023.