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Sub Suffers 3 Strikes In Attempt To Exploit No-damage-for-delay Exceptions

Tuesday, November 04, 2008 04:03 pm

Sub Suffers 3 Strikes In Attempt To Exploit No-damage-for-delay Exceptions

A subcontractor frustrated by project stops and starts tried to argue its way toward more than $300,000 in delay damages. But New York generally upholds no-damage-fordelays clauses, and a state supreme court stood firm in the face of both fraud allegations and three exception-to-therule arguments.

Premier-New York Inc. (Premier) subcontracted with Trataros Construction, Inc. (Trataros) to perform roofing work on a project at Baruch College in New York City. In drafting its bid, Premier relied on a sample CPM scheduleincluded with the subcontract documents. The actual project work, however, did not adhere to that schedule, and, as a result, Premier claimed it suffered delays and increased costs due primarily to work re-sequencing and lack of accessibility to key facilities. Premier argued that it would have submitted a higher price bid if it had been informed of the actual project circumstances. Trataros countered that the subcontract's no-damage-for-delay clause barred Premier from any recovery to make up for that alleged error -- and the court agreed.

At trial, Premier was up against unambiguous, clearly stated subcontract language that: a) described the CPM schedule as only a "sample," which was already seven months old by the time of contractor- subcontractor negotiations; b) warned that the subcontractor might be required to work out of sequence; c) required that Premier conduct an independent review of the project and take responsibility for acquiring any pertinent information about project status before entering the subcontract.

Plus, a no-damage-for-delay clause waived Premier's right to additional compensation for work hindered by delays, disruptions or [...]

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