De-inventing the Wheel: Liquidated Damages, Penalties and the Indian Contract Act, 1872

Swaminathan, Shivprasad

doi:10.1093/cjcl/cxy001

Cited by 6 publications

(5 citation statements)

References 0 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…When deciding the validity of a disincentive, the courts perform an intent, difficulty and reasonable test. While this is uniquely a US concept, these steps are common in countries that derive from the English common law with some variations existing concerning the reasonable test (Swaminathan, 2018). If one of these three tests do not pass, the disincentive clause fails as a penalty (Justia, 2019).…”

Section: Discussion: Avoiding Penalty Challengesmentioning

confidence: 99%

Section: Legal Challenges Faced By Clients In Imposing Disincentivesmentioning

confidence: 99%

“…The most significant challenge in enforcing LDs is the ambiguous penalty language inherent in common law-based contracts and legislation (Grant et al , 2014; Swaminathon, 2018). Per common law, an LD is enforceable if it is a genuine preestimate of damages expected upon the schedule breach (Swaminathon, 2018). However, the court determines whether the LD is a “genuine pre-estimate” or not, often difficult as LDs use is nearly exclusively on projects where the expected damages upon a breach are abstract and hard to measure (McCormick, 2003).…”

Section: Legal Challenges Faced By Clients In Imposing Disincentivesmentioning

confidence: 99%

“…However, the court determines whether the LD is a “genuine pre-estimate” or not, often difficult as LDs use is nearly exclusively on projects where the expected damages upon a breach are abstract and hard to measure (McCormick, 2003). Furthermore, there is no “sliding scale” option to determine an LD partially reasonable, and therefore, there is no option for the court to order a reduced LD; an LD is either fully enforceable or void (Swaminathon, 2018). While outside of the purview of this paper, enforcing LDs can also be complicated by the owner's contractual ambiguities (Grant et al , 2014) or questions of who was responsible for the delay (Brawn, 2012; Fawzy and El-adaway, 2013).…”

Section: Legal Challenges Faced By Clients In Imposing Disincentivesmentioning

confidence: 99%

See 3 more Smart Citations

Mitigating the legal challenges of imposing disincentives on nonperforming transportation projects

Alleman

2020

ECAM

View full text Add to dashboard Cite

PurposeThe publication presents an analysis of the cost and schedule performance of incentive/disincentive projects and case studies toward developing a systematic disincentive valuation process, with Construction Analysis for Pavement Rehabilitation Strategies (CA4PRS) software integration that aids agencies in minimizing the likelihood of court challenges of disincentives.Design/methodology/approachFrom a California transportation database, the authors performed cost and schedule analyses of 43 incentive/disincentive (I/D) projects and case studies on four of those I/D projects. Interviewees included subject matter experts from transportation organizations to ensure applicability and maximum value-adding, and the process was implemented on ten California transportation projects and monitored for performance.FindingsThe presented process mitigates the contractor's ability to claim disincentives as penalties in a court of law through the following: (1) all calculations are performed using project-specific bases, backed by estimations of actual incurred costs; (2) the CA4PRS software allows for estimation transparency and (3) the clarity of cost inclusions reduces any chances of “double-dipping” between disincentives and liquidated damages.Practical implicationsTransportation agencies have historically faced legal challenges to their enforcements of disincentives. As agencies continue to apply disincentives on more megaprojects, contractors will likely attempt to pursue legal challenges more frequently. The presented process mitigates the likelihood of these challenges going to court and increases the accuracy and efficiency of disincentives.Originality/valueWhile there have been publications that discuss the legal challenges of imposing disincentives, they mainly provide guidelines and lack applicable processes. Existing literature that does present incentive/disincentive valuation process focuses on incentive valuations and neglects the disincentives' legal challenges. The following publication fills this gap by presenting an applicable disincentive valuation process for transportation projects which incorporates the guidelines for legal mitigation.

show abstract

Section: Discussion: Avoiding Penalty Challengesmentioning

confidence: 99%

Section: Legal Challenges Faced By Clients In Imposing Disincentivesmentioning

confidence: 99%

Section: Legal Challenges Faced By Clients In Imposing Disincentivesmentioning

confidence: 99%

Section: Legal Challenges Faced By Clients In Imposing Disincentivesmentioning

confidence: 99%

See 2 more Smart Citations

Mitigating the legal challenges of imposing disincentives on nonperforming transportation projects

Alleman

2020

ECAM

View full text Add to dashboard Cite

show abstract

“…The Indian Contract Act, 1872 (ICA) is a progressive legislation that seeks to go beyond the constraints present within its source, the English common law. In several areas, be it consideration, communication of offers, or remission of performance, amongst many others, the rules embodied within the ICA are an improvement on the source material Swaminathan 2008 ; Swaminathan 2017 ; Swaminathan 2018 ). However, one area where this assertion does not hold is that of incapacity, specifically those agreements where one of the contracting parties is a minor.…”

Section: Introductionmentioning

confidence: 99%

Minors’ Contracts in the Digital Age

Gangwar

2022

Liverpool Law Rev

View full text Add to dashboard Cite

Minority is well established as a form of legal incapacity across jurisdictions and laws. Some countries grant minors with limited capacity to contract while others consider all minors’ contracts to be void. These rules were laid down in the pre-digital age. Minors today are entering into more and varied transactions than the generations before them, be it shopping on e-retail websites, creating social media accounts, or the more traditional employment contracts. This paper examines how the three jurisdictions of England, India and South Africa deal with minor contracts in the digital age. While South Africa permits minors above the age of seven years to enter into contracts with parental assistance, the English and Indian position is that minor contracts are unenforceable against minors, unless they are ‘contracts for necessaries’ or contracts for the benefit of the minor. Judicial interpretation of these categories has been fluid and indeterminate, creating its own set of problems. This paper argues from the Indian standpoint that the current understanding is inadequate to address the issues that will arise from the mismatch between law (where minority is almost synonymous with incapacity) and reality (where minors are increasingly entering into contracts). The author suggests that the definition for minority for contractual liability should be graded after the model of criminal liability and demonstrates that there are some, albeit imperfect, gains to be had from the South African system.

show abstract

Commercial Contract Law in the BRICS: A Comparative Overview

Infantino

2022

The Principles of BRICS Contract Law

View full text Add to dashboard Cite

De-inventing the Wheel: Liquidated Damages, Penalties and the Indian Contract Act, 1872

Cited by 6 publications

References 0 publications

Mitigating the legal challenges of imposing disincentives on nonperforming transportation projects

Mitigating the legal challenges of imposing disincentives on nonperforming transportation projects

Minors’ Contracts in the Digital Age

Commercial Contract Law in the BRICS: A Comparative Overview

Contact Info

Product

Resources

About