By Bruce Jervis
Active or intentional interference by the project owner with the contractor’s work is a widely recognized exception to the enforceability of no-damage-for-delay clauses. The Texas Supreme Court recently joined the national trend in expressly adopting this exception for private and public construction contracts alike. In so doing, however, the court left open the question of intent.
The question is whether the project owner must intend to delay or disrupt the contractor’s work, or, does the owner merely need to take an affirmative step that has the foreseeable effect of delaying the contractor? The Texas court said public policy prohibits a party from intentionally injuring the other party to a contract. The court spoke of “willful acts” and “bad faith.” The court then muddied the water by referring to “negligence” and “omissions.”
The public policy rationale for voiding no-damage-for-delay clauses in the face of owner interference seems to require an intention to harm. Yet, that is not the law in all states. And, as a practical matter, it is far more likely that a project owner acted in its own self interest with mere indifference to the impact on the contractor.
What is your opinion? Should a no-damage-for-delay clause be negated only when there is mal intent on the part of the project owner? Or, is it the impact, not the intention, of the act that is important? I welcome your comments.
