What is the difference between delay damages and liquidated damages?
Updated
Both are usually a daily rate written into the contract. Under AS 4000, liquidated damages are clause 34.7 and delay damages are clause 34.9. The 2025 edition calls clause 34.9 compensation for delays.
How it flows
Who pays: the contractor pays liquidated damages and the owner pays delay damages. When: liquidated damages run after the date for practical completion, and delay damages run during an extension of time. Trigger: a late finish for one and a paid cause of delay for the other.
An extension of time stops liquidated damages for those days. It does not always earn delay damages, because only some causes of delay are paid.
If the contract has no delay damages rate, claim your actual costs where the contract allows. Record site overheads and staff costs by day so the number is easy to prove.
Liquidated damages are paid by the contractor to the owner for each day the job finishes late. Delay damages are paid by the owner to the contractor for extra days the contract says the owner must pay for.
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