Construction focus: Delay damages and termination – Dan Cudlipp and Candice Johnson write for Property Law Journal
What happens to an employer’s rights to liquidated damages for delay when a building contract is terminated before practical completion of the works has been achieved? Dan Cudlipp and Candice Johnson discuss a case that made it to the Supreme Court.
The consequence of the Supreme Court’s considerations was that while penalties remain outlawed, that does not necessarily mean that liquidated damages cannot exceed the innocent party’s actual losses arising from the breach, so long as they are proportionate to the innocent party’s legitimate interests in having the contract performed.
This article was first published in Property Law Journal 390 (September 2021) and is also available on lawjournals.co.uk.