Preparing the published article.
Liquidated Damages and Delay Clauses
A delay clause is a risk allocation tool, not a punishment.
What to define
| Term | What it should state |
|---|---|
| Trigger | What counts as delay and how it is measured |
| Rate | Amount per day or week, and the cap |
| Exclusions | Accepted grounds such as force majeure or customer delay |
| Cap | Maximum exposure, often a share of contract value |
| Remedy | Whether damages are the only remedy or whether termination follows |
Practical checks
- Milestone definitions must be objective, so both sides agree when a day is lost.
- Caps that are too low make the clause meaningless; caps that are too high push price up.
- Your own obligations should be symmetrical, or delays you cause will still be counted.
Liquidated damages are a contract matter. Confirm the wording with legal advisers before issuing.