Is a penalty clause for delayed work enforceable in a Liechtenstein service contract?

Yes, a penalty clause for delayed work is generally enforceable under Liechtenstein law, provided it is clearly agreed in the contract. It represents a fixed, pre-determined amount of compensation and may be due even if no actual damage has occurred. The client (you) must prove that a delay took place, while the contractor bears the burden of showing that they were not at fault.

However, every penalty clause is subject to judicial moderation. Upon the contractor’s request, a court may reduce the penalty if it appears excessive in light of the contractor’s fault or the actual loss suffered. Any advance waiver of this moderation right is invalid.

Liability caps are also generally valid, as long as they do not exclude liability for intentional or grossly negligent conduct. If the contractor fails to meet agreed deadlines, you may e.g. claim the contractual penalty, set an additional grace period, withdraw from the contract, or seek damages in accordance with general contract law (each depending on the specific case).

We are happy to review your service agreement to provide you with a detailed assessment to your specific case. 

Yes, a penalty clause for delayed work is generally enforceable under Liechtenstein law, provided it is clearly agreed in the contract. It represents a fixed, pre-determined amount of compensation and may be due even if no actual damage has occurred. The client (you) must prove that a delay took place, while the contractor bears the burden of showing that they were not at fault.

However, every penalty clause is subject to judicial moderation. Upon the contractor’s request, a court may reduce the penalty if it appears excessive in light of the contractor’s fault or the actual loss suffered. Any advance waiver of this moderation right is invalid.

Liability caps are also generally valid, as long as they do not exclude liability for intentional or grossly negligent conduct. If the contractor fails to meet agreed deadlines, you may e.g. claim the contractual penalty, set an additional grace period, withdraw from the contract, or seek damages in accordance with general contract law (each depending on the specific case).

We are happy to review your service agreement to provide you with a detailed assessment to your specific case. 

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Yes, penalty clauses and liability caps are generally enforceable in a Liechtenstein service agreement, but with certain limitations. You also have several remedies available if your contractor misses deadlines.​

Enforceability of Penalty Clauses
In Liechtenstein, a penalty clause for delays is typically enforceable if it's clearly defined in the contract. This clause establishes a fixed, predetermined compensation amount that may be owed even if you haven't suffered any actual financial loss from the delay. To enforce this, you would need to prove that a delay occurred, and the contractor would then have to demonstrate that the delay was not their fault [web​
:1]. However, a court has the authority to reduce a penalty if it is deemed excessive.​

Enforceability of Liability Caps
Caps on liability are also generally valid in Liechtenstein. However, a key restriction is that these clauses cannot excuse the contractor from liability for actions that are intentional or constitute gross negligence. Additionally, in standard contracts, any clause that creates a significant disadvantage for one party may be considered invalid.​

Your Remedies for Missed Deadlines
Should your contractor fail to meet the agreed-upon deadlines, you have a few options under Liechtenstein law:

Claim the contractual penalty You can enforce the penalty clause as stipulated in your agreement.​

Set an additional grace period You can grant the contractor an extended timeframe to complete the work.​

Withdraw from the contract In cases of significant breach, you may have the right to terminate the agreement.​

Seek damages You can pursue a legal claim for damages based on general contract law.​

Sue for specific performance You can take legal action to compel the contractor to fulfill their contractual obligations.