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A subcontractor's work is 30 days behind schedule due to their own delays. The general contractor faces liquidated damages of $2,500 per day from the owner. What is the subcontractor's likely liability under a typical flow-down clause?

Correct Answer

A) $75,000 in liquidated damages caused by their delay

Flow-down clauses typically make subcontractors liable for liquidated damages caused by their delays: 30 days × $2,500 = $75,000.

Answer Options
A
$75,000 in liquidated damages caused by their delay
B
Liability limited to the subcontract value
C
Only actual damages, not liquidated damages
D
No liability as liquidated damages are between owner and general contractor

Why This Is the Correct Answer

Flow-down clauses typically make subcontractors liable for liquidated damages caused by their delays: 30 days × $2,500 = $75,000.

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