Q&As

Is it possible to claim for direct losses for delay in addition to liquidated damages where the contract does not state that liquidated damages are the sole remedy for delay?

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Published on LexisPSL on 18/05/2017

The following Construction Q&A provides comprehensive and up to date legal information covering:

  • Is it possible to claim for direct losses for delay in addition to liquidated damages where the contract does not state that liquidated damages are the sole remedy for delay?
  • Invalid LADs clauses

Is it possible to claim for direct losses for delay in addition to liquidated damages where the contract does not state that liquidated damages are the sole remedy for delay?

The general position is that, where parties have provided that liquidated damages (LADs or LDs) will be payable by the contractor if completion is delayed, this will be the employer’s sole remedy for such delay. In this situation, the employer will therefore not be able to seek general (ie unliquidated) damages from the courts in addition to, or instead of, claiming LADs—whether or not the parties have used express ‘sole remedy’ wording.

This is illustrated particularly in cases where parties have inserted ‘nil’ or ‘N/A’ as the amount of LADs payable. For example, in Temloc v Errill Properties, the parties had inserted ‘nil’ in the contract particulars against the amount of LADs payable. The court held that the effect of this was that LADs were still the employer's sole remedy for delay damages under the contract, but the parties had agreed the amount would be nil. The employer was not entitled to claim general damages instead.

In Chattan Developments v Reigill Civil Engineering the court, following Temloc, said:

‘…when there is a valid and enforceable liquidated and ascertained damages clause within an agreement, those damages are the sole remedy for the particular breach to which they relate,

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