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Understanding Consequential and Liquidated Damages Part 4

As Orlando construction lawyers, we know contracts can be breached and damages can be incurred when this happens. Whether these damages are direct, consequential, or liquidated, as a construction law firm that represents contractors, we are here to offer you any legal advice you may need in regard to damages and their means of compensation.

In this four-part article, in the first and second section, we discussed consequential damages. In the third section, we discussed liquidated damages. In this section, we will conclude our series on the benefits of liquidated damages.

The Benefits of Liquidated Damages

Liquidated damages allow both parties to have a complete understanding of the exact total amount of damages incurred if the contract is breached. This is helpful for both parties as trying to calculate the actual damages sustained on a project can be an extremely difficult and expensive process. In addition, having a lump sum of money that is understood by both parties as the penalty is a much more realistic option of recovering that money than determining a sum at a later date as well.

Benefits for the Contractor

Going into a project with a clear understanding of the liquidated damages allows the contractor the opportunity to strategize how they should pursue the project. The contractor is not only aware of the amount of damages they would be required to pay if the project does not meet its completion date, but also allows the contractor the opportunity to evaluate their plan of attack for the project.

The Contractor May Not Be at Fault

In many cases, the contractor is not at fault for failing to reach the completion date. If the contractor is not at fault, they should be provided with an excused delay or “relevant event” that provides the contractor with additional time to reach the completion of the project. In this case, the contractor may want to consider filing a loss and expense claim.

Damages, direct or indirect, are a complicated legal matter in construction law. It’s best to speak with an Orlando construction lawyer that will review your contract and provide you with the right legal counsel to ensure you are protected against unfair financial penalties from an owner.

If you would like to speak with one of our Orlando construction lawyers, please contact us at 407.378.6575, or submit our contact request form.

Disclaimer: The information contained in this article is for general educational information only. This information does not constitute legal advice, is not intended to constitute legal advice, nor should it be relied upon as legal advice for your specific factual pattern or situation.