Liquidated Damages, Performance Security and Termination

Every Indian works contract carries a default toolkit — delay damages, a performance guarantee, retention and a termination procedure — and most of it is quietly unusable by the time anyone reaches for it. This report sets out what section 74 of the Indian Contract Act 1872 permits, what the Supreme Court has and has not settled about proof of loss, and what the current standard forms require as against merely recommend. It is written for the client-side team deciding whether to levy, encash, extend or terminate.

Part of AECS Research Global's publications programme — drawing on ARG's work across cost management, EPC advisory and integrated project delivery. Download the full report below.