Breach of Contract Penalty & Liquidated Damages Calculator
Calculate commercial penalties and liquidated damages for contract breaches. Features logic for caps, per-diem fines, and contract value percentage limits.
Contract Parameters
Limitation of Liability (Cap)
Penalty is within limits.
About
In commercial agreements, precision is the antidote to litigation. This tool calculates liquidated damages - pre-agreed sums to be paid upon specific breaches of contract. It is designed for project managers, contractors, and legal teams to estimate exposure or enforce penalty clauses without ambiguity.
Unlike simple calculators, this engine adheres to complex logic often found in SLAs (Service Level Agreements) and construction contracts. It supports "Caps" (e.g., penalties cannot exceed 10% of the total contract value), variable triggers (fixed fine vs. daily accumulation), and duration multipliers. It ensures that the calculated damages remain within the enforceable boundaries defined by the contract's limitation of liability clause.
Formulas
The core logic evaluates the penalty accumulation against the contractual cap. Let P be the accumulated penalty and C be the Cap.
The final Enforceable Damages (D) are:
Where:
- d = Days in breach
- r = Rate per day
- V = Total Contract Value
- k = Cap Percentage (e.g., 0.10)
Reference Data
| Clause Type | Typical Structure | Example Value |
|---|---|---|
| Liquidated Damages (LD) | Per Diem (Per Day) | $500 / day of delay |
| Penalty Cap | % of Contract Value | Max 10% of Total |
| Performance Bond | Flat Guarantee | 5% of Bid Price |
| Material Breach | Immediate Termination | Full Contract Value |
| SLA Credit | % of Monthly Fee | 5% for 1h downtime |
| Late Delivery | Tiered % | 0.5% per week |
| Indemnity Limit | Multiplier | 2× Contract Price |