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Contract Disputes in the Construction Industry – Part 2
Contract Disputes – Delays, Damages, and Recovery
When it comes to project delays that incur additional cost, there are two categories: excusable and inexcusable delays. Generally speaking, only inexcusable delays will allow an owner to recover damages from a contractor, or a contractor from a subcontractor. Let’s look at the difference between excusable and inexcusable delays in contract disputes.
In DeSombre v. Bickle, 18 Wis. 2d 390, 118 N.W.2d 868 (1963), a contractor was given 400 days to complete a project – a deadline which they failed to meet. The owner took the contractor to court in order to recover damages in compensation for cost overruns due to the delay. The contractor claimed that bad weather excused them from performing their contractual duties within the 400 day time frame. However, the court held that the contractor should have anticipated that in those 400 days, there would be some days with bad weather, and the owner was able to recover damages. (1)
Generally speaking, for the court to consider a delay excusable, is must be unforeseeable. It can be difficult to prove a delay was unforeseeable. For instance, if a contractor did wish to claim that bad weather caused an unforeseeable delay, they would have to prove that the weather conditions were beyond what is normal for that location or time of year. One example where unforeseeable delay due to weather conditions would likely be provable would be in the case of a natural disaster, such as a hurricane or tornado. If a delay is found to be unforeseeable, the owner will likely have to give the contractor an extension of their deadline.
Role of Mediation in Contract Disputes
Not every breach of contract dispute need end up in a courtroom. In many cases, a skilled mediator can be crucial in resolving a dispute between owner and contractor. Mediation is typically a better option for both parties than litigation, as it will save time and money, and allow both parties to refocus on the completion of the project.
If you have questions or need help regarding a contract dispute, give us a call at New Mexico Financial law. We can help you work through your issues, and, if necessary represent you in litigation to recover damages.