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Liquidated damages for delay / late completion

Some common deviations/exceptions often taken with respect to LD provisions are:

ITT provisions

Exception/deviation by Tenderer

Client position

In the event of there being a delay in achieving the Contract completion date/milestones, Client shall deduct LD @ 0.5 % per week of delay subject to a maximum of 10 % of the total Contract price.

Amend 0.5 % to 0.25 % per week subject to a maximum of 5 % of the Contract price instead of 10 %.

The qualification is of a commercial nature and hence to be examined in light of whether the 5 % covers the direct loss suffered by Client in case of a delay by Contractor.
Further reducing the starting percentage from 0.50 to 0.25 % would allow twice the time required to reach the final 5 or 10 % LD amount thereby implying that the Client is able to tolerate delay for this duration.

Application of LD should start after an initial grace period of 3-4 weeks over the Contract completion date.

Again this is a commercial decision and if a delay in Contractors performance does not have a knock-on effect on the schedule of related downstream activities, such qualification could be examined favorably.

LD to be applied on the uncompleted portion of the Works/Services rather than the total Contract Price

Except in case of stage wise completion of Works/Services, this condition should not be accepted since the delay effects the whole works and hence the damages applied to the total Contract price rather than the uncompleted portion of works.

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