Construction - managing a liquidated damages claim

Step by step

1. Log the LD NoticeContracts

   Record the date received, LD rate, period claimed, and total deduction. File the notice in the contract record.

2. Review Extension of Time PositionProject Tracking

   Confirm all employer-caused delay events have been formally notified. Identify any outstanding EOT claims and the adjusted contract completion date.

3. Calculate LD ExposureJobs

   Apply the contractual daily or weekly rate to the overrun period. Model best-case and worst-case exposure where EOT is in dispute.

4. Assess Grounds for ChallengeContracts

   Check the client followed correct notice procedure, including issuing a certificate of non-completion. Identify any employer-caused delays not granted as extensions of time.

5. Issue Formal Written ResponseMentions

   Accept or challenge the deduction within the contractual timeframe, citing specific clauses and delay events. Clearly separate accepted and disputed elements.

6. Post Deduction to Job AccountInvoices

   Record the LD amount against the relevant job, update cost-to-complete forecasts, and flag the impact on final account projections.

7. Monitor Ongoing ExposureProject Tracking

   Track the revised programme weekly against the completion date. Maintain a running LD liability figure and issue further EOT notifications if new delay events arise.