NEC ECC: X18 - Indirect or Consequential Losses - What is a suitable level to cap this at?

We are being employed on a labour only basis to carry out 4 phases of work. Under X18 we asked that the Contractors Liability to the Client for indirect or consequential loss to be capped at 10% of the contract value for each phase. The 1st Phase is worth £400k for example, but the client want this to be £10 million (The overall contract sum is £2million over 2 years) - Surely this is a unreasonable figure?

In addition to this they are also proposing a delay damages daily charge under X7

This is a commercial decision for your client and you to negotiate in conjunction with your insurers. There are no hard and fast rules and what is reasonable will depend on a number of factors such as (1) what your client’s business is, (2) what harm you could cause to their business by carrying out the works, and (3) the extent of your scope and responsibilities under the contract.

Delay damages are a separate remedy specifically for the contractor’s breach of contract in failing to complete the works by the completion date.

It is common practice to see both X7 and X18 feature in contracts, it’s for each of the parties to understand the risk, consider how this may affect their business, and negotiate accordingly.