An Employer’s (Dis)Entitlement to Liquidated Damages for Delay Where the Contractor Never Completes: Defending ‘Orthodoxy’

Serena Lee

November 2020

A paper based on the joint first prize winning entry in the Hudson essay competition 2019 presented to the Society of Construction Law on 3rd November 2020

The paper questions the approach taken by the Court of Appeal in Triple Point Technology v PTT, a case which is due to be heard by the Supreme Court in November 2020. The Court of Appeal, in following the Glanzstoff case, decided that the liquidated damages clause should be construed as not applying where the original contractor did not eventually complete the works before the contract was terminated. The paper defends the ‘orthodox analysis’, arguing that, even where a clause closely resembles the wording of the provision in Glanzstoff, the approach is preferable because it accords better with the textual and contextual considerations that are likely to be applicable to such a clause. The paper suggests reasons why Glanzstoff should not be binding on other courts.

1. Introduction – 2. The decision in Triple Point: ‘orthodoxy’ discredited? – 3. The reasoning in Triple Point and Glanzstoff neglects several textual and contextual considerations – 4. How is Glanzstoff ‘binding’ on other courts? – 5. The ‘orthodox’ analysis is not ‘artificial and inconsistent with the parties’ agreement’ – 6. Conclusion

The author: Serena Lee is an associate at Quinn Emanuel Urquhart & Sullivan, LLP.

Text: 15 pages