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).

Continue Reading Court Finds Liquidated Damages Clause Unenforceable

Two contract provisions that are frequently litigated in construction disputes are no-damages-for-delay and liquidated damages clauses. A no-damages-for-delay clause typically provides that if there is a delay caused by the owner or others, the contractor will not be entitled to any additional compensation for that delay. It is a clause that project owners love because it limits their liability for delays on the project.

Similarly, 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). The Florida Second District Court of Appeal recently addressed both those provisions in an opinion it issued in January 2022.

Continue Reading Florida Court Finds No-Damages-for-Delay and Liquidated Damages Clauses Unenforceable