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The Apportionment-of-Delay Approach When a contract prescribes events and conditions for which the original contract completion date must be extended, the contract, itself, provides a mechanism to apportion responsibility between the parties for any overrun of the date: If delay results from specified events or conditions, the agency must extend the contract time, thereby apportioning delay.The courts can and will enforce that specific contract language by determining responsibility for discrete delays under the standards established in the contract.There are many reasons why liquidated damages may not be enforced, but they generally involve just a few legal concepts: (1) Whether any damages actually were suffered; (2) Whether the prescribed liquidated damages meet minimum requirements for reasonableness; (3) Whether the contract language requires the all-or-nothing or apportionment-of-delay analysis; (4) Whether liquidated damages are barred by acts or omissions of the owner which prevented timely performance, amount to a waiver, or estop the owner from enforcing the liquidated damages provision.Actual Damages and Reasonableness Before there can be any liquidated damages, there have to be actual damages.The liquidated damages must be a forward-looking attempt, as of the day the contract was signed, to estimate what the dollar amount of those actual damages would be. Code §§ 1442; (1954) 126 CA2d 381, 385, 271 P2d 397).If the liquidated damages are unreasonable under that forward-look, they are not enforceable at all (Civ. The All-or-Nothing Approach The standard judicial approach to liquidated damages, in any kind of contract, is all-or-nothing (5 Williston on Contracts (3d ed. It is the approach used with construction contracts that contain provisions for only (a) completion by a particular date and (b) liquidated damages for overrunning that date – in other words, contracts with no provisions for extending the completion date for events beyond the contractor’s control.Liquidated damages cannot be a penalty for the agency to club the contractor into compliance with punchlist, warranty, paperwork or other requirements that do not affect the use of the project as contemplated by the contract.
On appeal, the district sought the liquidated damages for that part of the overrun not waived by the chief engineer.Nomellini sued for remission of all liquidated damages. The same also obtains for all delays arising out of owner breaches of the contract, , interference with the contractor’s work on controlling operations.The trial court analyzed the delays, determined that the state not Nomellini was responsible for all of the delays, and remitted all liquidated damages. The Waiver/Estoppel/Prevention Theories Independent of the all-or-nothing and apportionment-of-delay approaches are equitable doctrines and principles of contract law that can also impact liquidated damages.the proper execution, progress or sequence of the work …the decision of the Chief Engineer shall be final and binding”) waived 113 days of liquidated damages (for district actions preventing site access, for excavation extra work and for inclement weather).