Alright Construction, Inc., signs a contract with Casa Del Monte, Inc., to build five new 20-room modules

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Alright Construction, Inc., signs a contract with Casa Del Monte, Inc., to build five new 20-room modules for a large tourist resort in a Caribbean country. Casa Del Monte establishes liquidated damages of $30,000 for each day over the contractual deadline of December 1. The damages are considered reasonable, based on a net income of $300 for each of the 100 new rooms. However, political instability in the country keeps tourists off the resort. It has an occupancy rate of just 20% during December. Alright Construction does have a delay of 15 days. Can this contractor claim that the liquidated damages should be limited to 20% × $30,000 = $6,000 per day?

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Construction Management

ISBN: 9781119256809

5th Edition

Authors: Daniel W. Halpin, Bolivar A. Senior, Gunnar Lucko

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