National Roofing Legal Resource Center

Contract provision addresses a liquidated-damages provision

Before signing a contract, roofing contractors always should carefully review the time requirements to see whether the contract includes a liquidated-damages provision. General contractor-drafted subcontracts and owner-drafted contracts sometimes include a liquidated-damages provision requiring the roofing contractor to pay a stipulated dollar amount each day the roofing contractor fails to obtain substantial completion per the contract requirements. In some cases, the general contractor or owner may seek to assess the roofing contractor with both liquidated damages and actual damages or just actual damages if the actual damages are greater than the stipulated liquidated damages.

When a contract includes a liquidated-damage provision, roofing contractors can use the following provision to limit their exposures for delay damages to stipulated liquidated-damage amounts.

Liquidated-damages provision: If this contract includes a provision entitling the general contractor or owner to recover liquidated damages for delays due to the fault of the roofing contractor, the liquidated damages shall be the general contractor’s or owner’s exclusive remedy against the roofing contractor for all damages based upon delays caused by the roofing contractor.

The amount of liquidated damages assessed against the roofing contractor by the general contractor shall not exceed a pro-rated amount of the liquidated damages the owner recovers from the general contractor based on the roofing contractor’s fault relative to other causes of delay.


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