Performance criteria liquidating damages
Sometimes the court must first determine whether one of the specified events or conditions occurred, , did the public agency really order extra work for which a change order should have been issued, including an appropriate time extension. “The law required that some provision for liquidated damages be inserted … The fact that the government’s action caused some of the delay presents no legal ground for denying it compensation for loss suffered wholly through the fault of the contractor … In that event though the owner causes delay the builder is liable in liquidated damages, but the period of delay caused by the owner is deducted from the total delay.This analysis of discrete delays under the standards established in the contract often results in a remission of some or all of the liquidated damages withheld by the agency. That case involved a contract which provided for both liquidated damages and extensions of time… In holding that apportionment was proper the court stated at page 488 [67 L. Unless the contract contains such a provision the delay due to each party will not generally be apportioned.” [italics in the original; bold face added] In other words, when the contract prescribes events and conditions for which the original contract completion date must be extended, the courts enforce this language by inquiring into every delay to determine whether it qualifies under the contract language for a time extension.However, the trial court remitted all 249 days of liquidated damages.On appeal, the district sought the liquidated damages for that part of the overrun not waived by the chief engineer.The actual damages must result from a delay in putting the project into operation.In other words, since actual damages resulting from delay cease when the project is complete enough to perform its intended function and the agency takes possession and starts using it, then liquidated damages must also cease at this point.
If the liquidated damages are unreasonable under that forward-look, they are not enforceable at all (Civ. The All-or-Nothing Approach The standard judicial approach to liquidated damages, in any kind of contract, is all-or-nothing (5 Williston on Contracts (3d ed. It is the approach used with construction contracts that contain provisions for only (a) completion by a particular date and (b) liquidated damages for overrunning that date – in other words, contracts with no provisions for extending the completion date for events beyond the contractor’s control.Nomellini sued for remission of all liquidated damages. The same also obtains for all delays arising out of owner breaches of the contract, , interference with the contractor’s work on controlling operations.The trial court analyzed the delays, determined that the state not Nomellini was responsible for all of the delays, and remitted all liquidated damages. The Waiver/Estoppel/Prevention Theories Independent of the all-or-nothing and apportionment-of-delay approaches are equitable doctrines and principles of contract law that can also impact liquidated damages.That attempt is judged as of the date the contract was signed. Another example, liquidated damages that may be appropriate for a project as a whole would generally not be reasonable during a plant establishment period, after all other work was completed.For example, if a storm drain is not completed on time, the agency suffers by having to provide alternative means to deal with storm water, plus possible extended inspection costs. Such liquidated damages could easily amount to a disfavored forfeiture (Civ.