ConstructionPro Week, Volume: 4 - Issue: 33 - 08/28/2015

Can Owners Redefine “Interference” in the Contract?

By Bruce Jervis

 

Active interference by a project owner is a well-recognized exception to the enforceability of no-damage-for-delay clauses. The definition of active interference, however, varies. In Pennsylvania, for instance, it includes an affirmative act not reasonably anticipated under the contract, as well as the failure to act as required for the work to proceed.

 

In a recent Pennsylvania case, a public project owner tried to rewrite the definition under the terms of the contract. The clause said the contractor’s sole remedy for delay would be an extension of time unless the cause of the delay was considered active interference under applicable law. The clause went on to define active interference to exclude the administration of change orders and the suspension or rescheduling of work.

 

The court ruled that the project owner could not rewrite legal precedent under the terms of its contract. The project owner had interfered with the contractor’s work through the inaction of its decision-makers and by physically impeding site access. The no-damage-for-delay clause was unenforceable.

 

What is your opinion on this? Shouldn’t parties be able to freely allocate risk of delay under the terms of their contract? And doesn’t that allocation require stipulation of the causes of delay that will or will not entitle the contractor to additional compensation? Or, does public policy demand that recovery of delay damages remain consistent and predictable, unaltered by the terms of an individual contract? Your comments are welcomed.

 

COMMENTS

 









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