Common use of Liquidated Damages Not Penalty Clause in Contracts

Liquidated Damages Not Penalty. The Parties acknowledge, recognize and agree on the following: (1) that because of the unique nature of the Project, it is difficult or impossible to determine with precision the amount of damages that would or might be incurred by Owner as a result of Design-Builder’s failure to achieve Substantial Completion on or before the Guaranteed Completion Date for Substantial Completion; and (2) that any sums which would be payable under this Article 7 are in the nature of liquidated damages, and not a penalty, and are fair and reasonable and such payment represents a reasonable estimate of fair compensation for the losses that reasonably may be anticipated from such failure.