Should a small fit-out contract have liquidated damages?
If late completion would cost the owner money, usually yes. Without LDs the owner must prove actual loss, which is slow and uncertain. For a small job, a simple clause works: a daily rate based on a written build-up of rent, holding-over and other costs, a cap if commercially necessary, a short list of extension grounds, a realistic notice period, and a defined certification step.
From the RRD Field Guide, checked against the sources cited in Liquidated Damages and Extension of Time in Singapore: An Owner's and Contractor's Guide. General information, not advice for your project.
The fuller picture
In Singapore, a liquidated damages clause is enforceable if it is a genuine pre-estimate of loss and not a penalty; the Court of Appeal in Denka Advantech (2020) kept the traditional Dunlop test and declined the UK Cavendish approach. LDs only run for delay the contractor is responsible for, so the contract needs a clear extension-of-time clause, notice rules and a certification step.
More questions on this topic
- Are liquidated damages enforceable in Singapore?
- Does the owner have to prove actual loss to claim LDs?
- What happens if the owner causes delay and there is no extension of time clause?
- If the contractor misses the EOT notice deadline, is time at large?
- How is concurrent delay treated in Singapore?
- Can LDs be deducted from a progress payment under SOPA?
- Are LDs capped?