The "time is money" axiom is often used to explain why delays on a construction project impact a contractor's bottom line. However, explaining and understanding how delay affects an owner's finances may not be as clear. This is because quantifying an owner's damages because of delay is often difficult and overly burdensome to determine with any specificity. As a result, many contracts incorporate a liquidated damages provision. Liquidated damages are a pre-determined form of compensation that may be assessed if a party fails to meet a contractual requirement. While liquidated damages can compensate a party for another's failure to achieve any contractual performance requirement, this article will focus on delay-related liquidated damages only.
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