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Liquidated damages are a pre-agreed sum per period of delay, intended as a genuine pre-estimate of the employer's loss rather than a punishment. The cap is the critical figure: once reached, delay damages stop accruing and the employer's remedy shifts to termination or general damages if the contract allows.
Accrued LDs
LDs = Contract value x Rate per week x Weeks of culpable delay
Payable
Payable = min(Accrued LDs, Contract value x Cap %)
Indicative estimate only. Fees, entitlements, limits and formulas vary by jurisdiction, statute, policy wording and the facts of the case. This is not legal, tax, insurance or financial advice — confirm with a qualified professional or the relevant authority.
A sum out of all proportion to any legitimate interest in performance may be struck down as a penalty. A reasoned pre-estimate recorded at the time of contracting is the best protection.
Yes. Only culpable delay attracts LDs, so granted extensions for excusable events remove those weeks from the calculation.