Mike McKeeman Published in Cost Engineering
“Liquidated Damages: Court Pulls Plug on Utility Contractor’s Case”

Mike McKeeman’s article, “Liquidated Damages: Court Pulls Plug on Utility Contractor’s Case,” was published in the June 2007 issue of Cost Engineering. The article examines delay-related liquidated damages in light of the U. S. 10th Circuit Court of Appeals decision in Hutton Contracting Co. v. City of Coffeyville. In the article, Mike and his coauthor explain that because, “delays on a construction project impact a contractor’s bottom line… many contracts incorporate a liquidated damages provision” in the event that a party fails to meet a contractual requirement.

The authors note that liquidated damages “are often an owner’s best leverage to ensure timely project completion.” They warn, however, that the “importance of establishing an appropriate liquidated amount cannot be understated,” because courts “will typically invalidate a liquidated damages clause if the amount set forth therein is unconscionable.” Mike’s article concludes that, “Courts across the country differ on many fundamental issues pertaining to the application and enforceability of liquidated damages clauses,” and therefore a, “thorough review of applicable law is often necessary before drafting such clauses or asserting rights there under.”