Damages Flashcards
What is the general principle of damages?
Damages is a financial remedy which aims to compensate the injured party for the consequence of a breach in contract.
What happens if “NIL” is inserted in the Appendix as the rate for liquidated damages?
Means the parties do not wish to claim liquidated damages, however this does not mean they cannot apply for unliquidated damages.
If the amount of LADs is too low can the Employer decide to refuse to collect LADs and claim unliquidated damages?
If the contract contains an applicable liquidated damages clause, the client is generally not permitted to disregard and claim unliquidated damages instead
What are liquidated damages? What does the employer have to do to levy liquidated damages?
Liquidated damages are pre-determined damages set at the time the contract was entered into, based on a calculation of the actual loss the client is likely to incur if the contractor fails to meet the completion date.
i. E.g. Rent on temporary accommodation, removal costs, extra running costs etc.
- That there has been a breach of contract;
- That it has suffered loss;
- That there is a causal connection between the breach and the losses that party wants to recover.
What are the advantages and disadvantages of LADS?
Advantages of a liquidated damages - no need to prove the actual loss since the clause provides a pre-estimation of the damages to be paid. In addition to helping recover damages, this helps to provide certainty to the parties.
Advantage of unliquidated damages is that it allows for recovery of losses which may have been impossible to foresee or to estimate with any certainty before the breach.
What is the difference between liquidated and unliquidated damages?
Liquidated are prespecified amounts in the contract.
Unliquidated means it will have to go through the courts to be claimed/calculated.
Name some situations when a client has a right to make a claim against the contractor.
Defective Work
Failure to comply with AI
Delay
Name some situations when a Main contractor has a right to make a claim against the client.
Actual loss that has been suffered
Any profit of which the MC has been deprived
Not being paid for work
MC disrupted by Emp
