Liquidating damages calculation for hud
17 both issues) Every public works project that overruns the contract time, as extended, enters into the realm of liquidated damages.There are many reasons why liquidated damages may not be enforced, but they generally involve just a few legal concepts: (1) Whether any damages actually were suffered; (2) Whether the prescribed liquidated damages meet minimum requirements for reasonableness; (3) Whether the contract language requires the all-or-nothing or apportionment-of-delay analysis; (4) Whether liquidated damages are barred by acts or omissions of the owner which prevented timely performance, amount to a waiver, or estop the owner from enforcing the liquidated damages provision.In the absence of contract language prescribing conditions under which the completion date would be extended, the district’s chief engineer (relying on this contract provision: “On all questions relating to …the proper execution, progress or sequence of the work …If the liquidated damages are unreasonable under that forward-look, they are not enforceable at all (Civ. The All-or-Nothing Approach The standard judicial approach to liquidated damages, in any kind of contract, is all-or-nothing (5 Williston on Contracts (3d ed. It is the approach used with construction contracts that contain provisions for only (a) completion by a particular date and (b) liquidated damages for overrunning that date – in other words, contracts with no provisions for extending the completion date for events beyond the contractor’s control.The first public works contracts reviewed by California appellate courts were of this type, and the all-or-nothing approach to liquidated damages was applied. (1941) 45 CA2d 334, 114 P2d 65, the contractor overran the completion date by 249 days.The correct rule is that where such delays are occasioned by the mutual fault of the parties the court will not attempt to apportion them but will refuse to enforce the provision for liquidated damages. (1963) 59 C2d 241, 245, 28 CR 714, 379 P2d 18, the supreme court confirmed that: [I]n the absence of a contractual provision for extensions of time, the rule generally followed is that an owner is precluded from obtaining liquidated damages not only for late completion caused entirely by him but also for a delay to which he has contributed, even though the contractor has caused some or most of the delay.
The liquidated damages must be a forward-looking attempt, as of the day the contract was signed, to estimate what the dollar amount of those actual damages would be. Code §§ 1442; (1954) 126 CA2d 381, 385, 271 P2d 397).
There, on a contract to build portable houses, the liquidated damages were /house/day. Pursuant to the contract, the state gave Nomellini 2440 house/days in extensions, leaving 4400 house/days of liquidated damages. The same obtains for all of the other risks that are allocated by the contract time extension clause.
Nomellini sued for remission of all liquidated damages. The same also obtains for all delays arising out of owner breaches of the contract, , interference with the contractor’s work on controlling operations.
On appeal, the district sought the liquidated damages for that part of the overrun not waived by the chief engineer.
The court held, at 45 CA2d 344-45: In making this contention defendant [district] seeks to have this court apportion the amount of delay attributable to each [Gogo and the district] and to fix damages accordingly.