I recently wrote an article in ConsensusDocs regarding liquidated damages and liability caps in the construction industry. 

I offered the following key takeaways:

• Liquidated damages (LD) for delay and performance — in combination with liability caps and other limiting provisions such as a waiver of consequential damages — are critical tools for contractors to negotiate reasonable limitations of liability.
• Understand the key differences between delay LDs and performance LDs, including awareness that delay LDs and performance LDs can be cumulative and non-exclusive of other types of damages (such as the cost to repair defective work). Consider a cap on the contractor’s aggregate liability on the entire project as one potential way to avoid uncertainty of potentially snowballing damage remedies for the owner.
• Attempt to allocate and cap risks based on risks each party can either manage, insure, or otherwise limit.

Reach out if you would like to learn more.