The agreement states a fixed dollar amount per day for late substantial completion. What is the purpose of that clause?
Correct Answer
C) To establish agreed damages for delay when actual damages are difficult to determine
Liquidated damages establish an agreed amount for delay damages when actual damages are difficult to measure, provided the clause is enforceable under the contract and law. Other choices confuse damages with bonds, cost reimbursement, or time-extension approval.
Why This Is the Correct Answer
Liquidated damages establish an agreed amount for delay damages when actual damages are difficult to measure, provided the clause is enforceable under the contract and law. Other choices confuse damages with bonds, cost reimbursement, or time-extension approval.
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