How they work
The contract sets a rate, for example per week of delay, and the client can recover it for each period the works are late beyond the completion date (as extended), without proving its actual loss. LDs usually replace the client’s right to general damages for delay, so the rate also limits the contractor’s exposure. Read more in our key contract terms guide.
Before deducting: the procedure
- JCT: deduction usually depends on a non-completion certificate and the employer’s notices, given in time, plus a valid pay less notice where LDs are deducted from a payment.
- Extensions of time: any extension of time must be decided properly first. Without a working EOT mechanism for client delays, the “prevention principle” can defeat the LD clause.
- Rate filled in: stating “£nil” can mean no damages for delay at all, so take care with the Contract Particulars.
Are LDs a penalty?
Rarely. Since Cavendish Square Holding v Makdessi [2015], a clause is an unenforceable penalty only if it imposes a detriment out of all proportion to the innocent party’s legitimate interest. Commercial parties who negotiated a rate will usually be held to it.
Caps and termination
Many contracts cap LDs, often as a percentage of the contract sum. In Triple Point Technology v PTT [2021], the Supreme Court held that LDs accrue up to termination even if the contractor never completes; after termination, the client claims general damages. See our case studies.
General information, not legal advice. What applies to you depends on your contract, the facts and where the work is, and the law changes. Check the sources below and take advice from a qualified professional before acting on anything that matters.
Last updated: 9 October 2026
