A general contractor has entered into a construction contract with a public entity in New Jersey and the work commences. As be the case, there are delays on the project. Very often, the public entity seeks to collect damages from the general contractor for such delays while the contractor seeks extra time. Less often, as will be considered here, it is the general contractor who seeks damages as a result of delays and contends that those delays were caused by the public entity’s actions or inactions.
A review of the contract reveals two key terms that address this issue. The first states that the contractor cannot recover for delay damages unless the actions of the governmental entity fall into certain limited circumstances (“no damage for delay” clause). The second relevant clause states that if the case falls into one of those limited circumstances, such delay damages are fixed at a per calendar or working day amount (“liquidated damage” clause). The question then becomes whether the contractor can recover any damages for delay and, if so, how much it can recover.
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