In Mafco Electrical, an electrical subcontractor brought suit for damages against the general contractor, alleging delay claims and seeking equitable adjustment of the contract for approximately $875,000.00. The U.S. District Court granted the contractor’s motion for summary judgment because the contract contained a “no damages for delay” clause.
The subcontractor claimed that it was harmed by the contractor’s abandonment of the construction schedule and allegedly poor supervision of the work. The subcontract provided for an extension of time in the event of delay, but also stated that the subcontractor “expressly waives and releases all claims or rights to recover lost profits, recovery of overhead, and any other indirect damages, costs or expenses in any way arising out of or related” to the subcontract, including “delay, charges, acceleration, loss of efficiency or productivity disruptions and interferences with the performance of the work.” The subcontractor did not dispute the applicability of this clause, but argued that one of several equitable exceptions should prevent its enforcement.
The court noted that Connecticut law recognizes “no damages for delay” clauses and allows that such clauses are valid except under four specific circumstances: (1) delays caused by bad faith or willful, malicious or grossly negligent conduct; (2) uncontemplated delays; (3) delays so unreasonable that they constitute an intentional abandonment of the contract; and (4) delays resulting from breach of a fundamental obligation of the contract. Carefully considering the subcontractor’s factual allegations, the court held that none of the subcontractor’s claims satisfied one of these four conditions. The court was also persuaded by the subcontractor’s failure to give notice of its purported damages in a timely fashion, as required by the subcontract. Thus, the court held that the no damages for delay clause barred the subcontractor’s claims, and granted the contractor’s motion for summary judgment.
Mafco Electrical Contractors, Inc. v. Turner Construction Company, 2009 U.S. Dist. LEXIS 24499 (D. Conn. March 26, 2009)