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Delay-causing Owner Can't Limit The Cure Since Owner Was Itself The Disease

Wednesday, June 04, 2008 03:00 pm

Delay-causing Owner Can't Limit The Cure Since Owner Was Itself The Disease

An appeals court disallowed a project owner from using boilerplate contract language as a liability loophole when it clearly caused a contractor's work delays. The safety net for the contractor, who, despite many hold-ups did not file for the time extensions required by its contract, was R.C. 4113.62(C)(1), an Ohio statute that invalidated the no-damages-for-delay clause in this case.

Ohio Public Employees Retirement System (OPERS) hired Cleveland Construction, Inc. (CCI) to build portions of an office tower in Columbus, Ohio. A trial jury found that OPERS breached the contract between the two parties by failing to properly schedule and coordinate project tasks. In fact, evidence at trial described delays that occurred on a daily basis and forced CCI to complete the work, which it did on time, in a non-sequential, less-than-efficient manner. OPERS did not dispute the jury's finding, but it did appeal the jury's award of $640,298 to CCI in delay damages.

OPERS alleged that the parties' contract designated a time extension as the "sole remedy"available to CCI for "interference, disruption, hindrance or delay"and that this language was valid and enforceable.

No-damages-for-delay clauses, such as the one detailed above, may be standard, but they are void "when the cause of the delay is a proximate result of the owner's act of failure to act,"the appeals court declared, citing R.C. 4113.62(C)(1) (the statute). The court overruled OPERS' appeal on all counts.

Broad definition of "del [...]

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