Liquidated damage:

1. Liquidated damage is an amount of compensation payable by a contractor to the owner or Government due to delayed construction having no relationship with real damage.
2. If the contractor fails to complete the works within the time prescribed in the tender then the contractor shall pay to the owner or Government the sum stated in the tender as liquidated damages for such default and not as a penalty for every day for the excess period taken between the date of completion specified in the tender or the extended time as the case may be and the date of actual completion of the work.
3. The payment or deduction of such damages shall not relieve the contractor from his obligations and liabilities under the contract.

Unliquidated damage:

1. This is known as ordinary damage having relation with the actual damage done.
2. When a contract has been broken, the party who suffers by such breach is entitled to receive, from the party who has broken the contract.