20TSH101 - Constitution, HR and Law - Case Study - Law Assignment Help

Assignment Task

CASE STUDY The casual meeting between Mohan, a purchase manager with his junior manager and the manager from contract team led to discussion on the recent issues the public sector company they work is facing in the contract management arena. Mohan highlighted how their company is facing issue relating to repeated delay from the supplier side and this is leading to issue of their commitment to the clients not being met.

The manager from the contract team, clearly mentioned that the Liquidated Damages clause in the General Conditions of Contract provision help in ensuring these issues are tackled. Mohan suggested to the manager from the contract team to increase the Liquidated Damages amount by increasing the percentage of contract value charged as LD.

Mohan also suggested increasing the cap of Liquidated Damages from the existing 5% of total contract value as provided in their company contract template would be a better idea. But manager from contract team was agitated at the suggestion from Mohan and mentioned that the contract cannot be used as tool for pressurising their suppliers and contractors and mentioned that legally it may not be a possible approach. Mohan was not convinced with the statement and further pursued to understand the legal issues pertaining to liquidated damages.

Questions to be discussed:

1) What is damages and liquidated damages in a contract?

2) Can the damages be pre-determined in a contract?

3) Can ONGC claim the LD amount for delay in the supply of the casing pipe? Is Saw Pipes argument valid?

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