Liquidated Damages Risk Calculator

LDs cap delay exposure and drive schedule focus.

Daily LD amount

Expected delay days

LD cap % of contract

Contract value

LD exposure

$300,000

Raw delay LD

$300,000

LD cap amount

$1,760,000

How the math works

Raw LD = daily × days. Cap = contract × %. Exposure = min of raw and cap.

$10k × 30 = $300k raw. Cap $22M × 8% = $1.76M. Exposure $300k (below cap).

How to Use

Enter daily LD amount.
Enter expected delay days.
Enter LD cap as % of contract.
Enter contract value.
Read LD exposure.

Frequently Asked Questions

LD mechanics?

Contractual amount per day of delay past substantial completion. Must be reasonable estimate of owner's actual damages. $5k-$50k/day typical on commercial; sometimes more on time-critical projects. Usually capped at 5-10% of contract.

Enforceability?

Enforceable if liquidated damage is reasonable estimate at time of contract. Unenforceable if punitive or grossly excessive. Challenged in court 30-40% of time on large projects; usually upheld if reasonable relation to harm.

Negotiation?

GC asks for: specific delay causes exempt (owner-caused, weather, FM events). Cap at 5-10% of contract. Allowance for force majeure. Reasonable daily rate. Two-way LDs (early completion bonus). All reduce risk/cost.

Who owns this risk — sponsor or lender?

Construction risks are typically shared: hard-cost overrun owned by sponsor (via completion guaranty), soft-cost and delay risks shared per contract, force-majeure excused but bears owner carry cost. Document risk ownership in the loan agreement and GC contract before closing. Disputes get expensive when roles are unclear. Institutional deals spell out every allocation in writing.