What term refers to penalties for not completing work on time in a bid?

Liquidated damages refer to specific financial penalties outlined in a contract to be imposed if one party fails to complete work by the agreed-upon deadline. This concept not only provides a predetermined amount that the breaching party owes but also serves as a deterrent against delays by indicating the financial consequences of failing to meet timelines.

In a bidding context, the inclusion of liquidated damages helps both parties understand the importance of timely performance and sets a clear expectation for project completion. It allows for easy enforcement and understanding of consequences in case of delays, rather than potentially lengthy and complicated damage assessments after the fact.

The other terms offered may indicate consequences related to contract breaches but do not specifically denote the pre-established financial penalties that liquidated damages represent. This specificity makes the term appropriate for situations involving the timely completion of work.