Right to impose pre-termination LDs even though work was never accepted? Yes.

In relation to the right to impose liquidated damages (“LDs”) for a terminated contract, the UK Supreme Court endorsed the “orthodox analysis” in the case of Triple Point Technology, Inc v PTT Public Company Ltd [2021] UKSC 29. The relevant contractual provision stipulates the contractor’s liability for liquidated damages “from the due date for delivery up to the date [the employer] accepts such work”. The Court held that whether or not the work was accepted, the employer’s right to impose LDs would apply from the point in time when liquidated damages are contractually stipulated to start accruing (i.e. when the works should have been completed) up to the point of termination of the contract. Thereafter, liquidated damages will no longer accrue and general damages resulting from the termination will have to be sought, as necessary.

Note however that there is no right to impose liquidated damages for delays in completion of the works where the contract is terminated before the contractual completion date passes.

This “orthodox analysis” is in line with the current position in Singapore.

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