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4) EXTENSION OF TIME AND LIQUIDATED ASCERTAINED DAMAGE (LAD)
WHAT IS LIQUIDATED ASCERTAINED DAMAGES (LAD)?
The Liquidated Ascertained Damages It might be that there's a sourcing
(LAD) clause is an important part of a problem with some key materials.
construction contract. It's designed to Perhaps there was an accident in
cover any predicted losses which might construction that delays the entire
occur as a result of a project overrunning process. These things do happen.
or being delayed The Liquidated
ascertained damage (LAD) clause is an As such, ensuring the financial
important part of a construction contract. obligations of such delays are clear and
It's designed to cover any predicted losses recorded is just a smart part of
which might occur as a result of a project construction contracts.
overrunning or being delayed.
An important thing to remember is This clause sets out a predetermined
that LAD is not a financial penalty and estimate of any losses which the employer
neither is it implemented as a is likely to incur if a project overruns
punishment for a breach of (read: takes longer than the agreed date).
construction contracts.
Under the LAD clause, a sum of money is
It’s actually a pre-agreed part of the
contract itself between an employer agreed which will be recovered by the
employer for every day of delay beyond
and contractor. Now, it’s fair to say
that delays can sometimes occur in the agreed upon completion date.
construction projects.
