While contractors, subcontractors, and other construction practitioners often feel they understand how contractual provisions related to liquidated damages, incentives/disincentives, lane rental charges, stipulated sums, and penalty clauses should be applied, quite often the opposite is true. The misuse of such provisions can result in being deemed invalid as not representing actual damages or as a penalty and thus void as against public policy. In this session at the Construction SuperConference, Michael McKenna, Ed Seglias, and Jayne Czik will explore the dos and don’ts of using such provisions, including how and when to assess monetary fines. They will also highlight key cases and recent developments in how courts have been evaluating the enforceability and validity of such provisions.
Upon completion of this seminar:
- Attendees will gain a greater understanding of how liquidated damages and other such clauses operate, the need for evaluation of actual damages vs. these provisions, the ways they are distinct from the imposition of penalties, which are generally void as against public policy, and the importance of evaluating the reasonableness of the potential damages in a contract.
- Attendees will better understand the legal differences between stipulated damages and actual damages through real-life examples, and gain awareness of judicial interpretations as to the validity of these clauses.
- Attendees will obtain useful information about variations of the liquidated damages provision, including the legality of the imposition of the “lane rental charges” (frequently found in public roadway contracts) whose validity can be questionable.