Legal Question in Construction Law in Massachusetts

liquidated damages

My small business contracted to install 1,000 lockers in a MA school. the constract had a completion date of August 22, with liquidated damages of $2,000 per day for each calendar day after 22nd that project was not completed. First part of contract discussed ''Substantial Completion'', second part discussed final completion. Either way, the lockers were installed on 22nd, and usable. The locks were installed five days later. The lockers were functional as lockers on the 22nd. Only the locks themselves, which are accessories were not installed. the school is charging me $9,600 in liquidated damages. There was NO DAMAGE, injury or harm to anyone on those days that the locks were not on. Several of those days there was not school. The school claims that I signed the contract for $2,000 per day, and that no locks means they were not functional. (We installed these in two schools in the town. Once school didn't need locks, the other did.) So, they are admitting that the lockers without locks were functional and usable.

Do I have a chance in winning this suit?


Asked on 12/17/08, 2:20 pm

2 Answers from Attorneys
Steven Striffler Steven R. Striffler Attorney At Law

Re: liquidated damages

First, see if your contract defines the term "substantial completion" you may have satisfied this requirement. Second, did the school in-fact use the lockers during the 5-day period? Are there any circumstances where you would be entitled to a "time-extension"? Generally, in Mass, liquidated damage clause are enforceable. You should speak with an attorney who understands construction law. Feel free to contact me.

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Answered on 12/18/08, 12:02 pm
Christopher Vaughn-Martel Charles River Law Partners, LLC

Re: liquidated damages

It appears in this case that the harm done to the school was that they had 1,000 lockers that wouldn't lock.

In Massachusetts, a liquidated damages clause will be upheld under most circumstances, so long as it is not punitive in nature. It should be noted, that in order for a liquidated damages clause to be enforced, the party need not demonstrate actual damages (which, after all, is the point of using a liquidated damages clause in the first place).

You should probably take the contract to be reviewed by an attorney, and see if your exposure to liability can be limited in any way.

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Answered on 12/17/08, 3:14 pm


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