## Facts

- Westar Energy, Inc. owned and operated a coal-fired power facility and undertook an upgrade to its flue gas desulfurization (FGD) system.
- Westar contracted with Wahlcometroflex, Inc. for the manufacture and delivery of FGD dampers for three units at a total contract price of $6,229,185.50.
- The contract specified “Latest Allowable Dates” for delivery for each unit.
- The contract included a liquidated damages clause stating delivery timing was critical and that Westar would suffer financial loss if the work was not completed on time.
- The clause required Wahlco to pay liquidated damages of 1.5% of the total contract price per week for each week beyond the applicable latest allowable delivery date, capped at 10% of the total contract price.
- Wahlco delivered the equipment late, and Westar assessed liquidated damages up to the 10% cap.
- Wahlco contended Westar could not recover liquidated damages without proving the late deliveries actually delayed the overall project and caused loss attributable to Wahlco.

## Issues

1. Under Kansas law and the contract’s text, must Westar prove Wahlco’s late delivery actually delayed Westar’s project schedule (and caused actual loss) to recover liquidated damages?
2. Or does late delivery alone trigger liquidated damages according to the contract’s formula, up to the contractual cap?

## Decision

- The Tenth Circuit affirmed summary judgment for Westar.
- The court held Westar was not required to prove actual project delay or actual damages as a condition precedent to recovering liquidated damages.
- The liquidated damages provision was triggered by Wahlco’s failure to meet the latest allowable delivery dates, and Westar could recover under the agreed formula up to the 10% cap.

## Legal Principles

- Under Kansas law, an unambiguous liquidated damages clause is enforced according to its terms when it reflects an agreed, reasonable estimate of anticipated damages at the time of contracting and actual damages would be difficult to measure.
- When a contract ties liquidated damages to a specified event (here, late delivery by defined dates), courts do not add an extra condition requiring proof of actual delay or actual loss unless the contract so provides.
- Liquidated damages provisions allocate risk and avoid the need for complex proof of causation and quantification of delay-related losses in large projects.

## Conclusion

The court enforced the delivery-based liquidated damages clause as written, concluding that Wahlco’s late delivery alone triggered Westar’s right to recover liquidated damages up to the contractual cap without proof that the late deliveries actually delayed the project or caused a specific amount of loss.


Wahlcometroflex, Inc. v. Westar Energy, Inc., 773 F.3d 223 (10th Cir. 2014)