Better Roads Digital Magazine
Issue link: https://read.dmtmag.com/i/86539
InCourt by Brian Morrow Winds A hurricane trumps a "no liability" clause in a delay damages case. C onstruction projects are time sensitive by nature. Owners, developers, contractors, subcontractors and material suppliers commit to a project timeline so they can realize their anticipated profits within a defined schedule. When a project is delayed, one of the risks is escalating material costs. With delays, foreseeable and unforeseeable con- ditions can lead to price increases, especially for products based on commodities such as oil. As a result, material price escalation clauses have become more prominent over the past decade. However, many contracts lack a materials escalation clause. Even without such a clause, if an owner delays a contractor's work, the first place to turn is 9a October 2012 Better Roads of Change the contract to determine whether the contractor can recover delay damages. In a recent Arizona case — Technology Construction, Inc. (TCI) v. City of Kingman, 229 Ariz. 564 (decided June 12, 2012) — the Arizona court of appeals awarded delay damages to TCI relating to the increased price of asphalt due to Hurricane Katrina, despite the lack of a materials escalation clause and a "no liability" clause in the city's favor. In July 2005, TCI contracted with city of Kingman for the construction of a railroad underpass for $5,226,722. Work on the project was scheduled for two phases. Phase 1 included a shoofly and reloca- tion of a sewer line and water line, was scheduled to begin June 1, 2005, and was to be completed by June