A daily fine the contractor pays for every day the project is finished late.
Liquidated damages are a pre-agreed amount of money the contractor must pay the owner for each day of delay beyond the contract completion date. They compensate the owner for damages that would be difficult to calculate precisely at the time of contracting. Liquidated damage rates must be a reasonable pre-estimate of actual damages, not a penalty.
The school district contract specified $2,500 per day in liquidated damages if the contractor failed to complete the project before the start of the school year.
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