Contract Performance Disputes In India: Defending Against Termination, LD, And Risk-Purchase Claims

Public and private sector contracts in India often end up in disputes not because contractors underperform, but because projects are delayed, disrupted, or changed mid-stream in ways no party anticipated. Contractors are then penalised with liquidated damages (LD), threatened with wrongful termination, or saddled with inflated "risk-purchase" claims when the employer re-awards unfinished work. These disputes fall squarely within the arena of tender litigation in India, and contractors who do not contest such actions often lose not just margins but reputation and future opportunities.

The Indian tender litigation process recognises the need for balance between employer rights and contractor defences. Wrongful termination of a government contract, excessive liquidated damages, or exaggerated risk purchase claims can all be challenged before arbitral tribunals or courts. For contractors, the key is to frame a claims suite—extension of time (EOT), price