Liquidated Damages and Extensions of Time

Question: Discuss about the Liquidated Damages and Extensions of Time In Construction Contract. Answer: A party may claim Liquidated damages if its provisions has been made in the contract and the claimant can justify the breach of contract by the other party. A liquidated damages clause must clearly specify the amount of money that the defaulting party has to pay as damages for failing to perform as per terms of the contract, (Eggleston, 2009). To make the charge enforceable in the court of law, the clause of liquidated damages must fulfil the following two criteria. The court is likely to enforce the liquidated damages provision, provided the claimant is able to justify that the damages have incurred because of a breach of contract. Secondly, the amount should be a reasonable one and definitely should not be a penalty. The courts usually take into consideration the fact whether the amount was reasonable and was expressed clearly at the time of signing the contract by the parties rather than at the time when the breach occurred, (Emanuel, 2006). In the light of these factors, it can be concluded that Mullers satisfy both the above cited criteria. Justification and reasonableness of the amount had been clearly mentioned and was based on the justifiable assumption of loss due to non-receipt of rent in case of delay. It is not a penalty, but claim for income lost due to delay in completion of the house. Mullers can surely justify the claim in the court of law and they have the right to invoke the provisions of Liquidated damages and recover their loss from Light, (Twomey, Jennings Greene, 2016). List of References Eggleston, B. (2009) Liquidated Damages and Extensions of Time: In Construction Contracts (3rd ed.). West Sussex: John Wiley Sons. Emanuel, S. (2006) Contracts (12th ed.). New York: Aspen Publishers Online. Twomey, D.P., Jennings, M.M. and Greene, S.M. (2016) Anderson's Business Law and the Legal Environment (23rd ed.). Boca Raton: Cengage Learning.