How good are you at spotting red flags?

How good are you at spotting red flags?
How good are you at spotting red flags?

When we end bad relationships we often kick ourselves for not seeing all the red flags. Business relationships are exactly the same.

Today’s video is about the major red flags that you should look out for when you sign a contract and begin a working relationship with a client. To find out Why Liquidated Damages Matter in Contracts ​click here​ or continue with this quick read.

Contracts set out the parameters for a working relationship. If a contract contains certain clauses you can pretty much predict how the relationship will end up, and who will end up crying into their ice cream, to use a Hollywood metaphor.

What is the hidden impact of liquidated damages in contracts and why is it so important to understand why they’re significant?

First, a bit of a history lesson.

About 30 years ago, if you were late on a construction project the owner/client would have to take you to court.

Damages would be awarded depending on the verdict.

This system meant both parties had to pay legal fees, not to mention spend time going through this process.

Then the liquidated damages came into play.


It’s a genuine pre-estimate of what the damages will be to the client if you are late.

What does CONSEQUENTIAL DAMAGES mean? If you’re asked to build a hotel, for example, if you are late on the project, the client could insist that you reimburse them for loss of profit, i.e. pay for the cost of letting their rooms.


Here are 3 Things that you need to negotiate into the liquidated damages clause in EVERY SINGLE CONTRACT

  • The liquidated damages clause must say that liquidated damages are the sole remedy for delay.
  • Negotiate the value of the liquidated damages. Our research and stats show that 1% is a reasonable amount. 1% is the benchmark.
  • The biggest thing is capping how big the liquidated damages can be. The benchmark is to cap it at 5-10% of the contract value.

We want you to be the MOST SUCCESSFUL you can possibly be. That’s why we put together content with tips and advice that is tried and tested.

For more contractual advice, Quantum Contract Solutions is here to guide and assist you through everything contract related. Let’s reduce risk in your contracts and save time and money, just click this link to get our FREE case study to show you how clients just like you are doing it.

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