Can a client deduct liquidated…

Can a client deduct liquidated damages if they have not incurred a loss?

Yes, provided the amount stipulated for liquidated damages was a genuine pre-estimate of the client’s loss. The genuine purpose must not be to penalise the contractor but rather be to compensate the employer. The actual damage need not be proved and it does not matter that the actual loss is greater or less that the stipulated sum.

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Over the years our we have helped clients with many different issues and questions. We therefore though that it might be useful to share some of the more common ones which we thought might be of general use.

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