Liquidated Damages (Delay Damages) Calculator

Liquidated damages are a contractually pre-agreed financial rate that the contractor pays to the project owner for each day or week of unexcused delay past the certified completion date.

Under US common law (Restatement (Second) of Contracts § 356), liquidated damages are enforceable only if they represent a reasonable pre-estimate of anticipated loss at contract execution. If the stipulated rate is punitive rather than compensatory, courts strike it down as an unenforceable penalty.

An approved Extension of Time (EOT) shifts the contractual completion date forward, reducing net delay days. Liquidated damages cannot be assessed for days covered by an approved EOT.

A liability cap sets a maximum upper ceiling on total accrued delay damages (typically 5% to 10% of the total contract price), protecting contractors from unlimited financial exposure.

Under FIDIC 1999 Red Book Sub-Clause 8.7, delay damages accrue at the rate stated in the Appendix to Tender up to the maximum limit. In FIDIC 2017 Red Book Sub-Clause 8.8, the clause explicitly requires compliance with Employer claims procedures (Clause 20) before deducting funds, and confirms the cap does not apply to deliberate default or fraud.

The project owner or engineer deducts assessed liquidated damages directly from gross certified progress earnings on monthly payment certificates before issuing net payment to the contractor.

Yes, provided the pre-agreed rate was a reasonable pre-estimate at contract signing. The purpose of liquidated damages is to eliminate the need to prove actual financial losses after a delay occurs.

In cases of concurrent delay, standard contract principles generally grant the contractor an Extension of Time (relieving them of liquidated damages for that period) but deny contractor monetary delay costs.

Liquidated damages are pre-agreed daily or weekly financial sums specified in a contract to compensate the owner for losses caused by contractor-caused completion delays.

To be enforceable, the daily LD rate must represent a genuine pre-estimate of loss calculated at the time of contract execution, rather than an arbitrary punitive penalty.

No. Under a valid liquidated damages clause, the owner does not need to prove actual loss in court; they only need to establish that unexcused contractor delay occurred.

Contracts commonly limit total cumulative LDs to a maximum cap of 5% to 10% of the total contract price to limit contractor liability.

Daily LD Rate = Total Estimated Financial Losses (lost rent, financing interest, extended supervision, storage) ÷ Anticipated Delay Days.

An approved EOT extends the contractual completion date, relieving the contractor of liquidated damages for the approved extended period.

Sectional completion sets separate milestones for distinct building phases, each with its own pre-determined daily LD rate proportional to that section's value.

Yes, under standard FIDIC and AIA conditions, owners may set off accrued liquidated damages against monthly interim payment certificates or retentions.

If contractor delay coincides with owner-caused delay during the same period, standard construction law principles (e.g. SCL Protocol) bar the owner from assessing LDs for that period.

If the LD rate is blank or designated as 'N/A', the owner cannot assess liquidated damages but retains the right to claim unliquidated actual damages in court.