Restrictions in the enforcement of liquidated damages (LDs) in road construction: the case of Upper East and Upper West Regions of Ghana.

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When a road project is completed late due to the fault of the contractor, the client is entitled to some remedy, which is a contractual provision by the Liquidated Damages (LD) clause. Often times contracting parties suffer in one way or the other through misapplication of LD clause of a contract. This research seeks to determine the level of enforcement of LDs, to identify the main measures that will enhance the enforcement of LDs for road construction contracts. The aim of the research was achieved by interviewing two major stakeholders involved in road construction contract administration; Clients organization and the contractor organization on the issue of restrictions in the enforcement of Liquidated Damages (LDs) in Road construction contracts. The main purpose of LDs in road construction contracts are not achieved, clients organization have created situations that makes LDs clause difficult to be enforced, LD amounts stated in contracts are also not realistic pre-estimates of the expected losses to be incurred. In order to enhance the enforcement of LD clause, clients’ organizations need to make every effort to adhere to the LD contract provisions; a more scientific method needs to be developed for the determination of quantum of LD. There is also the need for guidelines in regulating the LD deductions.
A Thesis submitted to the Department of Building Technology, Kwame Nkrumah University of Science and Technology In partial fulfillment of the requirements for the degree of Master of Science in Procurement Management, October-2013