An owner's delay has traditionally been recognized as either an absolute or partial contractor defense against an assessment of liquidated damages. However, owners are increasingly employing contractual provisions and arguments that seek to prevent contractors from raising owner-caused or owner's concurrent delay as a defense to the assessment of liquidated damages. The law has long declined to enforce liquidated damages provisions which function as penalties. Attempts to preclude contractors from raising owner-caused delay as a defense render the assessment of liquidated damages a penalty. The presentation will discuss fundamental legal principals related to enforcement of liquidated damages provisions, including the law's evolving approach to apportioning liquidated damages assessments in the face of the owners' delay, concurrent or otherwise. Standard defenses against assessments of liquidated damages will be discussed. In addition, a legal framework for contractors to challenge arguments that they have waived their ability to raise the owner's concurrent delay as a defense to an assessment of liquidated damages will be presented. Our talk will also provide recommendations for how contractors can best position themselves to defeat an assessment of liquidated damages.
Upon completion of this session, participants will be able to:
- Understand the historical underpinnings of liquidated damages provisions in contracts and the legal prerequisites for the proper enforcement of liquidated damages provisions.
- Understand the current erosion of contractor defenses to the enforcement of liquidated damages and how one might still prevail against such claims.
- Understand clauses aimed at limiting the contractor defense of concurrent delay to an owner claim for liquidated damages. The group will understand why a liquidated damages claim made, despite concurrent delay, may be an unenforceable penalty.