Recent case law developments have demonstrated that courts continue to back LAD provisions in contracts – confirming the need for contracting parties to take these provisions seriously.
Liquidated and ascertained damages (‘LAD’ or just ‘LD’, or even “Delay Damages”) are a pre-determined amount agreed between the parties to a contract and are used to deal with culpable delay and specified contract breaches. LAD provisions provide certainty as to the consequences of the specified reaches, they limit liability, and are time and cost efficient. Well-drafted LAD clauses mean the parties avoid costly debates about how much the defaulter should pay for a breach. Two important decisions concerning LAD clauses have been handed down in 2021, Triple Point Technology and EWB v Dobler, dealing with the issue of calculating costs for delay and the contractual interpretation of LADs clauses, respectively.