Comprehensive guide on what Liquidated Damages are, how they are calculated, and how to avoid them on GeM.
[!TIP] Quick Answer: Liquidated Damages (LD) ek penalty hai jo buyer lagata hai jab seller delivery period (DP) ke andar items deliver nahi kar pata. Ye delay ke hisaab se haftawari (weekly) 0.5% lagti hai.
| Rule | Detail |
|---|---|
| Weekly Penalty | 0.5% of delayed quantity value |
| Maximum Penalty | 10% of total contract value |
| Calculation Basis | Delayed days beyond Delivery Period |
| Exemption | Force Majeure clause applies |
Sarkari contracts mein time par delivery sabse zaroori hai. Agar aap late hote hain, toh system automatically Liquidated Damages calculate karke aapke payment se deduct kar leta hai.
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| Delivery Status | LD Applicable? |
|---|---|
| Within DP | No |
| Beyond DP without extension | Yes |
| Beyond DP with approved extension without LD | No |
Are you going to be late? -> Request DP Extension -> Does buyer accept with LD? -> Yes -> Deliver goods and accept penalty.
[!WARNING] Agar delay bahut zyada ho jata hai aur LD 10% cross kar jata hai, toh buyer contract terminate karke PBG forfeit kar sakta hai.
| Feature | DP Extension without LD | DP Extension with LD |
|---|---|---|
| Reason | Delay due to buyer/unavoidable reasons | Delay due to seller fault |
| Payment | 100% | Deducted by LD percentage |
Q1: Can LD be waived? A: Only if the buyer agrees that the delay was beyond the seller's control (e.g., buyer delayed site readiness).
Q2: Does GeM deduct LD automatically? A: Yes, during the bill generation process, the GeM system computes the delay based on PRC date and applies LD.
(...13 more FAQs covering Force Majeure, GST on LD, part-deliveries, etc.)
Learn what happens if a contract is completely cancelled in our Termination guide.
Estimate your potential penalties using our LD Calculator.
Independent Platform Disclaimer: SahayakAI is an independent AI-powered procurement knowledge platform and is not affiliated with Government e Marketplace (GeM), CPPP, IREPS, or any Government authority.
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