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Liquidated Damages: An Analysis Of Their Use And Effectiveness, Alfredo N. Aragon

Construction Management

A construction company’s success and/or failure is dependent upon project completion with respect to time and budget. Failure to meet the contract completion date results in a loss of profit for owners and contractors alike. In order to help mitigate project delays, liquidated damage clauses have been included into construction contracts. Incorporating provisions within the construction contracts in the form of liquidated damages aims to help shift the financial burden when there is a failure to meet contractual obligations, hopefully offering quick compensation for delays. Unlike general or actual damages, liquidated damages are pre-defined and agreed upon prior to entering …