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ARTICLE · 06 JANUARY 2026

Liquidated Damages: Protecting Contractors When Global Supply Chains Break

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To ensure liquidated damages clauses are both enforceable and equitable, construction professionals should work closely with legal counsel to craft provisions that include clear, adequate checks...

United StatesReal Estate and Construction
Richard Whiteley
Richard Whiteley
Phillip L. Sampson Jr.
Phillip L. Sampson Jr.

To ensure liquidated damages clauses are both enforceable and equitable, construction professionals should work closely with legal counsel to craft provisions that include clear, adequate checks to prevent overreach or ambiguity.

Supply-chain disruptions in construction and other industries are no longer aberrations and are now viewed by market participants as routine due to many factors, including trade disruptions, tariffs, political and/or diplomatic tensions, changing policies and regulations as well as climate related events.

Indeed, the risk of supply-chain disruptions are rated as high or very high by over 60% of market respondents in recent surveys.1 The perceptions are not inaccurate, as disruptions have been significant in 2025, with approximately 80% of organizations experiencing at least one major instance of supply chain disruption.2

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