Are liquidated damages enforceable in US construction contracts?
Generally yes, if two conditions are met: actual damages from delay were difficult to estimate at contract signing, and the stipulated per-day amount is a reasonable forecast of that loss. If the amount is disproportionate to any conceivable loss, courts may strike it down as an unenforceable penalty.
How are construction liquidated damages calculated?
Multiply the contractual per-day LD rate by the number of days the project finishes late, after subtracting any excusable delay days for which a time extension is owed. Federal and many private contracts assess LDs per calendar day of delay.
Can an owner recover both liquidated and actual damages?
No. Liquidated damages are the agreed exclusive remedy for delay. An owner generally cannot recover LDs and also separately claim actual delay damages for the same delay, unless the contract expressly separates categories of loss.
What is the penalty doctrine?
US courts refuse to enforce a liquidated-damages clause that operates as a penalty — a sum grossly in excess of a reasonable estimate of anticipated harm. The clause must be compensatory in purpose, not a threat designed to coerce timely performance.