The liquidated damages clause below is part of a construction industry agreement. Read the clause and answer these questions.

The liquidated damages clause below is part of a construction industry agreement. Read the clause and answer these questions.

1. Why do you think such clauses would be of particular importance in the construction industry?

2. What does the legal expression time is of the essence in the first line mean?

3. How much would the owner be entitled to receive as damages if the work were not completed in ten days as agreed, but rather in 15 days?

4. In the event of a breach of this clause, how will the owner receive compensation?

FAILURE TO FINISH THE WORK ON TIME

It is mutually agreed by and between the parties hereto that time is of the essence and that in the event of the Contractor's failure to complete the contract within the time stipulated and agreed upon, the Owner will be damaged thereby; and because it is difficult to definitely ascertain and prove the amount of such damages, inclusive of expenses for inspection, necessary traveling expenses and other similar expenses, it is hereby agreed that the amount of such damages shall be the liquidated sum of Two Thousand Dollars ($2,000.00) per calendar day for each day of delay in finishing the Work in excess of the number of working days prescribed; and the Contractor hereby agrees that such sum shall be deducted from amounts due the contractor under the contract or, if no amount is due the Contractor, the Contractor hereby agrees to pay to the Owner as liquidated damages, and not by way of penalty, such total sum as shall be due for such delay, calculated as aforesaid.

For each of these words, find the italicised word or expression in the clause that most closely matches its meaning.

1 in the form of

2 specified in writing

3 more than

4 jointly

5 is owed to

6 including

7 as stated above

8 subtracted from