Unliquidated Damages

Unliquidated damages are general damages for breach proven on the basis of actual loss — the default where the contract sets no liquidated figure, and the yardstick against which LDs are tested.

Where it sits: Ordinary contractual damages principles: Hadley v Baxendale remoteness; the genuine pre-estimate test for the liquidated alternative (Cavendish v Makdessi [2015] UKSC 67).

No LD clause, and the employer proves delay loss the hard way: extended financing, prolonged professional fees, lost rent or production, each evidenced and each open to challenge on remoteness. It is slower and often larger than anyone priced — which is precisely why liquidated damages exist, and why an unenforceable penalty clause is a worse position than none at all (the penalty falls away and the employer is back to proof).

The practical mirror: contractors fear unliquidated exposure more because it is unbounded; employers fear it because it is unprovable. The LD clause is the treaty between those two fears, and its rate is the price of avoiding this entry.