Certain contracts entered into contain punitive non-performance clauses such as liquidated damages. A liquidated damages clause pre-sets the damages recoverable for a specified breach, usually for late delivery. The agreed amount payable is ordinarily subject to a maximum percentage of the contract price and is relatively simple and inexpensive to enforce. This can provide businesses that are affected by delayed supplies with the ability to recover relatively quickly at least some of the losses and/or added expense they may be incurring, but equally can hit suppliers hard.
If you identify clauses such as these in your contracts, then these need to be built into business continuity planning in terms of prioritisation and avoidance.
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