Volume 6 - Number 16 | April 21, 2008 - Construction Claims Advisor

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You are here: Home » Volume 6 - Number 16 | April 21, 2008

Volume 6 - Number 16 | April 21, 2008

EDITOR'S NOTES | Issue 6-16: This week’s first two cases provide an interesting dichotomy in states’ views on no-damage-for-delay clauses. In Ohio, the clauses have been rendered unenforceable by statute. A court ruled that this also applies to any attempt to disclaim liability for acceleration or lost productivity costs (which are just other forms of delay damages). In New York, the clauses are generally enforceable and one court would not even allow a jury to hear evidence that an exception might apply.

The other case faults a contractor that failed to take the steps necessary to terminate a subcontractor. Because of the lapse in protocol, the contractor could not collect from the performance surety.

Did you miss WPL Publishing’s recent audio conference on contract negotiations? If so, it’s not too late to get the inside scoop on what owners and contractors think during the negotiation process. You can order the audio CD at http://www.constructionclaims.com/products/audio_seminars/1417-1.html.

DISCLAIMER OF ACCELERATION AND LOST PRODUCTIVITY DAMAGES RULED UNENFORCEABLE: A state statute nullifies a contract’s no-damage-for-delay clause. As a result, the owner can be liable for acceleration costs and lost productivity.

COURT REFUSES TO ALLOW JURY TO CONSIDER EXCEPTION TO DELAY DISCLAIMER: A no-damage-for-delay clause stands despite testimony from the subcontractor that alleged gross negligence, one of the state’s four statutory exceptions.

PRIME MISHANDLES SUBCONTRACTOR DEFAULT AND LOSES RIGHTS AGAINST PERFORMANCE BOND: Failure to follow contract protocol on a default termination leaves a contractor without recourse against the defaulted subcontractor’s performance surety.