Definition of detailed and specified damages (LAD)
Detailed and Determined Damages (LAD), also known as detailed damages (LD), refers to the measure of damage that has been agreed upon by the parties (buyer and developer) in a contract, especially in a construction contract, to compensate for certain violations, the usual delay in the completion of works. LAD is the amount of money that has been agreed upon by two parties as compensation for possible losses.
Purpose and application
LAD serves as a fair representation of losses in situations where actual losses are difficult to determine. It is designed to provide a clear way of calculating damages in the event of a breach of contract, particularly in cases where the loss is abstract or difficult to define. In construction contracts, the LAD protects the non-breaching party from financial loss due to delays or other breaches of the contract.
Advantages and considerations
LAD offers a number of advantages, including providing a clear way of calculating damages, serving as a deterrent against breach of contract, and saving time and cost by avoiding complex disputes over the amount of general damages. However, it is important for LAD clauses to reflect the legitimate interests of the innocent party and not simply to punish the breaching party.
Overall, Detailed and Specified Damages (LAD) is a contract provision that specifies the amount of money to be paid if one of the parties breaches the contract, especially in the case of delayed completion of works in a construction contract. It serves as a fair representation of loss in situations where actual loss is difficult to determine and provides a clear way of calculating damages in cases of breach of contract.
