X, Inc., awarded to Y Corp. the development of titsresidentialsubdivisions consisting of 2parcels of land. Liquidated damages was fixed by the parties to serve as penalty in case Y Corp.fails to fulfill the obligation on time.

Notwithstanding three extensions granted by X Corp. to Y Corp., the latter failed to finish the contracted works. It is 94.53% complete. X Corp. wrote Y Corp. advising the latter of its intention to hold Y Corp., liable for liquidated damages (penalty) which it had incurred. Y Corp. claims that its failure to finish the contracted work wasdue toinclement weather. Decide.