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ARTICLE · 29 OCTOBER 2015

Adapt Construction Pty Ltd v Whittaker 2015] ACTSC 188: Nil liquidated damages

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This case shows where a zero liquidated damages clause did not prevent the recovery of general damages for delay.

AustraliaReal Estate and Construction
Andrew McCormack
Andrew McCormack
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KEYWORDS: EFFECT OF NIL LIQUIDATED DAMAGES

KEY TAKEAWAY

Even if a contract states that no ("zero" or "nil'" liquidated damages are payable to a party for a delay, that party may still be entitled to claim common law damages, subject to the intention of the parties. This case provides an example of where a "zero" liquidated damages clause did not prevent the principal from recovering general damages for delay.

The facts

The dispute concerned a standard form building contract that provided that if the builder did not complete the house by the date contracted, liquidated damages would be payable at the rate specified. A space was left blank in the contract for the rate of the liquidated damages to be inserted, with a note stating "(if nothing stated, Zero)" (at [67]–[68]). The house was not completed by the date for practical completion as specified and the proprietors sought about $50,000 in general damages from the builder for the delay (at [7]).

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