By Bruce Jervis
“Active interference” by the project owner is a well-recognized exception to the enforceability of no-damage-for-delay clauses in construction contracts. There is a problem, however. There seems to be little agreement as to what constitutes active interference.
In the past, courts usually required some showing of bad faith or gross negligence in order to find active interference. This has changed, with an emerging majority requiring only an affirmative, intentional act by the owner that resulted in interference with the contractor’s work. No malice is required. But, the act has to be something more than a careless mistake or lapse in judgment.
This is a slippery definition, as indicated in a recent decision by the Connecticut Supreme Court. The project owner directed an electrical contractor to start work even though the owner’s asbestos abatement contractor had not completed its work. This forced the electrical contractor to perform work out of sequence. The court said no bad faith was required in order to invoke the active interference exception. However, the Court enforced the no-damage-for-delay clause nonetheless because the owner did not know its directive would create a trade conflict. It was a mere error of judgment.
What is your understanding of active interference by the project owner? Do you believe it should require ill intent or gross incompetence? If not, how does one distinguish between an affirmative act and a mere error of judgment? I welcome your comments.
