I recently gave a presentation on essential construction contract provisions at the annual conference for the Florida Municipal Attorneys Association. Part of my presentation addressed liquidated damages clauses in government construction contract. After speaking, I was approached with follow-up questions about how to determine the proper daily rate for liquidated damages in construction contracts.
A liquidated damages clause is an owner-preferred contract provision that usually sets a fixed amount for which the contractor is liable to the owner if the project is not finished on time. Often, the amount is set as a certain sum of money per day the project is late (e.g., $1,000 per day).
Generally, liquidated damages provisions are enforceable. But there are circumstances where courts will refuse to enforce such a provision (click here for a recent Florida case where the court found a liquidated damages provision unenforceable).