How to pass them on to sub-contractors
Handling liquidated damages –
If the principal asserts a claim against the general contractor on the grounds of delayed completion of the construction work due to a culpable breach of contractual duty by a sub-contractor, the general contractor is faced with the issue of whether or not it may pass on the claim asserted by the principal to its sub-contractor. Passing on these liquidated damages may have a material effect on the financial position of the sub-contractor because the penalty clause agreed upon between the general contractor and the principal may provide for an amount that even exceeds the compensation owed to...
