A recent case out of Pennsylvania refused to allow an owner to assess liquidated damages for project delay. This case serves as a reminder that if you are including liquidated damages in your construction contract, there must be some reasonable basis for the amount of liquidated damages. In this case, D.A. Nolt v. The Phila. Mun. Auth., the City of Philadelphia sought to enforce a $10,000 per day liquidated damages [...]
Construction contracts often contain liquidated damage provisions, requiring a contractor to pay a set amount for each day the project is delayed. But, as the Nebraska Supreme Court recently ruled, in U.S. Pipeline v Northern Natural Gas, an owner can waive liquidated damages where its actions induce the belief that the owner intended to waive liquidated damages. In this case, the parties agreed that the work would be done in [...]
I had lunch with the American Society of Professional Estimators (ASPE) the other day and we discussed construction contracts. There were a lot of questions about liquidated damages. As I explained during the meeting, liquidated damages can provide some certainty about damages under a contract, but if the clause is unreasonable, it will not be enforced. Here is some more information on liquidated damages. What are Liquidated Damages? Liquidated damages [...]
You likely see them in every contract. The Subcontract encompasses both the agreement itself and the underlying prime contract. But how often do you actually look at the prime contract? And, what kind of liability are you assuming under the prime contract? A small Kansas supplier learned the hard way that language in the prime contract can create substantial liability. Arch Environmental Equipment is a small bulk materials conveying equipment [...]
A recent case out of Tennessee raised the question of whether claims for liquidated damages were subject to the contract's claim procedure time limits. The Tennessee Court of Appeals held that the owner waived its claim for liquidated damages because it did not follow the claim procedure. I'm sure that came as a surprise to the owner. In this case, the owner claimed it was entitled to $237,000 in liquidated damages [...]
