A contractor is bidding on a project that has a liquidated damages clause in the contract. Liquidated damages are:

Actual damages that the contractor will pay to the owner is there is a delay in completion of the project.

A specified amount of money the contractor will pay to the owner per day if there is a delay in completion of the project.

Damages caused by liquids such as by rain storms floods tsunamis and oil spills.

A penalty imposed on the contractor for every day the contractor is late in completing the project.