Liquidated damages: evaporating when the going gets hot?

Glenn Kangisser, and Fiona Cain, at Haynes and Boone LLP, report on a recent UK Supreme Court ruling on liquidated damages clauses

Parties to shipbuilding and offshore construction contracts generally welcome the certainty afforded to them by liquidated damages clauses which address the question of damages payable in the event of specified breaches. Such clauses not only limit a contractor’s exposure, but they also remove the need for an employer to prove their loss (potentially an expensive and time-consuming process).