Liquidated damages

A pre-agreed sum payable for delay. Enforceable if it is a genuine estimate.

What it means

Liquidated damages are a fixed rate — usually per week — payable by a contractor for late completion, agreed in advance.

Why it matters

They give certainty to both sides: the customer does not have to prove loss, and the contractor knows the maximum exposure.

What it looks like in practice

They must be a genuine pre-estimate of loss rather than a penalty, or they are unenforceable — and if they fall away the customer can claim actual losses instead, which may be worse.\n\nExtensions of time reduce the period they run for, which is why the extension mechanism matters so much.

What to watch out for

Agreeing a rate without checking it against the contract value. And failing to apply for extensions of time promptly, which is usually a contractual precondition.

Where to get proper advice

A construction solicitor before signing. Track and claim extensions of time as events occur.