An issue that continues to bedevil the construction industry is
whether general damages are recoverable when the parties agree that
liquidated damages are not. In a typical scenario where this issue
arises, the parties will have agreed that liquidated damages are
not payable if the contractor is late in performing its works by
striking out the liquidated damages clause in a standard form, or
by stating that the rate of liquidated damages is "nil",
"£0" or "n/a". By doing this, are they
implicitly agreeing that the employer is also unable to recover
general (or unliquidated) damages, i.e. damages that the employer
proves that it actually suffered due to the contractor's
delay?
In one case last year from
Western Australia, the court upheld an arbitrator's finding
that general damages were recoverable where liquidated damages were
stated to be "n/a". There has been another recent case
where the Court of Appeal of Western Australia reached a similar
conclusion.
