LIQUIDATED DAMAGES IN THE CONTRACT ON CONSTRUCTION

Abstract

The construction contract is one of the most complex treaties in goods traffic. Performing the construction works was governed by the civil law contracts, later on by provisions of some other contracts, and more recently the construction contract has become an independent contract of commercial law. This contract is characterized by the role of administrative law. It is followed by a very extensive technical documentation. The essential elements of the contract are determined by law, but by the will of the contracting parties even irrelevant elements can become the essential ones. In the realization of this contract there participates a lot of parties, among which some hold the customer side and the others support the side of the performer. There are numerous rights and obligations that the parties must follow through and fulfill and which they are responsible for. The most common method of the termination of the construction contract is its fulfillment. The liquidated damage is the most important and common collateral for the construction contract. In the past our legislation anticipated the liquidated damage as an essential element of the construction contract being envisaged in the case of not fulfilling the contractual obligations. With the construction contract it is mostly determined because of the incorrect fulfillment of the contractual obligations. The amount of the liquidated damage is freely negotiated by the parties and it can either be determined by a certain amount for each day of delay or in a total amount. It is usually calculated from the moment of lag till the fulfillment of main duties. If the damage suffered by the purchaser exceeds the liquidated damage, he has the right to claim the compensation for an amount exceeding the amount of the fine. But if the damage is less the purchaser is entitled to claim liquidated damages, but not the damage. The contractor is obliged to pay neither the liquidated damage nor the damage if the non-fulfillment was caused by something he was not responsible for.