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any of these things (and many more) could result in your paying for liquidated damages under a Broad Form Liquidated Damages Clause, even if you are innocent of delay. So, before you sign a Broad Form Liquidated Damages Clause, do a gut check and make sure you are willing to pay liquidated damages for every delay on a project, regardless of whether you caused it. If you are so willing, then grab your pen and sign on the dotted line. If you feel uneasy, however, you should push to renegotiate that contract to a liquidated damages clause, limiting your payments to project delays for which you are solely responsible.
The solution is at once profoundly simple and yet difficult in practice. Just don’t sign a contract with a dangerous liquidated damages clause in it; renegotiate it. Simple, right? “But Jeremy,” some of my clients have sagely remarked, “I don’t want to hurt my company’s relationship with the client who wrote the contract by making waves.” Here’s where things get difficult. If you sign a Broad Form Liquidated Damages Clause, you are taking on the risk of losing money for any delay on the project, regardless of who or what causes it . Do you trust every other subcontractor on a project not to delay the project? Do you trust the general contractor not to delay the project? Do you trust the weather? Suppliers? Permitting authorities? Delays caused by
If you want to learn more skills and tips about avoiding construction claim pitfalls, you can receive a free copy of my book “The Subcontractor’s Roadmap to Getting Paid for Extra Work” by emailing me at email@example.com.
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