Of all the reasons I come across for non-payment when running building industry payment claims, liquidated damages is by far the most common. This is a concept which promotes destructive behavior and should be scrapped.

I have never understood the point of liquidated damages. Contractually, they are there to compensate a party for its genuine pre-estimate of costs incurred due to the other party completing work late as the delay will, so the story goes, cause damage for which the party should be compensated. Even…