A construction contract specifies liquidated damages of $1,500 per day for delays beyond the 180-day completion deadline. If the project is completed on day 195, what is the total liquidated damages amount?
Correct Answer
B) $22,500
Days late: 195 - 180 = 15 days. Liquidated damages: 15 days × $1,500 = $22,500.
Why This Is the Correct Answer
The correct answer is B) $22,500. To calculate liquidated damages, you must first determine how many days late the project was completed (195 - 180 = 15 days), then multiply by the daily rate ($1,500 per day). This gives us 15 days × $1,500 = $22,500 in total liquidated damages. Liquidated damages are predetermined amounts specified in the contract to compensate for delays.
Why the Other Options Are Wrong
Option A: $15,000
This answer incorrectly calculates only 10 days late (10 × $1,500 = $15,000) instead of the actual 15 days late.
Option C: $18,000
This answer incorrectly calculates only 12 days late (12 × $1,500 = $18,000) instead of the actual 15 days late.
Option D: $24,000
This answer incorrectly calculates 16 days late (16 × $1,500 = $24,000) instead of the actual 15 days late.
Memory Technique
Remember 'LCD': Late days × Contract rate = Damages. Always find the Late days first, then multiply by the Contract rate to get total Damages.
Reference Hint
Look up contract administration and liquidated damages clauses in your construction law or contract management chapters
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