{"id":904501,"date":"2025-06-26T15:48:21","date_gmt":"2025-06-26T21:48:21","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=904501"},"modified":"2025-06-26T15:48:23","modified_gmt":"2025-06-26T21:48:23","slug":"consequential-damages-when-delays-cost-more-than-time","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/consequential-damages-when-delays-cost-more-than-time\/","title":{"rendered":"When Delays Cost More Than Time: Understanding Consequential Damages"},"content":{"rendered":"\n<p>Matthew DeVries | <a href=\"https:\/\/www.bestpracticesconstructionlaw.com\/2025\/06\/articles\/legal-trends\/when-delays-cost-more-than-time-understanding-consequential-damages\/\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Best Practices Construction Law<\/a><\/p>\n\n\n\n<p>When I draft and negotiate construction contracts\u2014whether representing contractors, subcontractors, or owners\u2014there\u2019s always one provision that seems to get special attention: the <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/consequential-damages-inconsequential\/\">waiver of consequential damages<\/a>. For good reason. It can significantly impact both parties\u2019 exposure if things go sideways on a project.<\/p>\n\n\n\n<p><strong>So what are \u201cconsequential damages,\u201d and why do they matter?<\/strong>&nbsp;Consequential damages are losses that don\u2019t flow directly from a breach, but arise as a secondary result of it. For an owner, this might include lost profits from project delays, loss of use or lost rental income. For a contractor, it might be loss of bonding capacity, lost business opportunities, or financing issues if the project goes off track.<\/p>\n\n\n\n<p>This is why the AIA contracts and many custom forms include a \u201cwaiver of consequential damages\u201d clause. Consider the industry standard provision from&nbsp;<strong>AIA A201-2017, Section 15.1.7<\/strong>, which reads:<\/p>\n\n\n\n<blockquote class=\"wp-block-quote is-layout-flow wp-block-quote-is-layout-flow\">\n<p><em>\u201cThe Contractor and Owner waive Claims against each other for consequential damages arising out of or relating to this Contract. This mutual waiver includes: (1) damages incurred by the Owner for rental expenses, for losses of use, income, profit, financing, business and reputation, and for loss of management or employee productivity or of the services of such persons; and (2) damages incurred by the Contractor for principal office expenses including the compensation of personnel stationed there, for losses of financing, business and reputation, and for loss of profit except anticipated profit arising directly from the Work.\u201d<\/em><\/p>\n<\/blockquote>\n\n\n\n<p>Courts often enforce these waivers strictly, especially when they\u2019re clearly worded. But what happens if your contract says nothing?<\/p>\n\n\n\n<p>A recent New York appellate case,\u00a0<em><a href=\"https:\/\/www.nycourts.gov\/courts\/ad4\/Clerk\/Decisions\/2025\/0606T1500\/pdf\/0374.pdf\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Vermillion v. The Roofing Guys, Inc.<\/a><\/em>, drives this point home. The plaintiff, a homeowner, hired a roofer for a simple re-roofing job. During the project, a storm caused significant water damage. The homeowner sued for breach of contract and attempted to introduce expert testimony to support a claim for consequential damages\u2014claiming financing delays, increased mortgage rates, and higher material costs. But the contract said nothing about consequential damages.<\/p>\n\n\n\n<p>The court refused to allow that claim. Why? Because under New York law (like most states), consequential damages can only be recovered if the parties specifically contemplated them at the time of contracting. The court found the agreement was a \u201cbare bones\u201d contract that didn\u2019t mention these types of damages, and there was no evidence the parties ever discussed them. As a result, the homeowner was barred from presenting any evidence or testimony about consequential damages.<\/p>\n\n\n\n<p><strong>Here\u2019s the lesson:<\/strong>&nbsp;don\u2019t be silent on the issue of consequential damages. Whether you\u2019re an owner or a contractor, address the risk head-on. If you want to preserve the right to recover these types of damages, or if you want to avoid the risk entirely, you need to say so in the contract.<\/p>\n\n\n\n<p>Construction is already risky. Clear contract language can at least ensure you know what risks you\u2019ve agreed to bear. Don\u2019t leave it to the courts to guess.<\/p>\n\n\n\n<hr class=\"wp-block-separator has-alpha-channel-opacity\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Matthew DeVries | Best Practices Construction Law When I draft and negotiate construction contracts\u2014whether representing contractors, subcontractors, or owners\u2014there\u2019s always one provision that seems to get special attention: the waiver of consequential damages. For good reason. It can significantly impact both parties\u2019 exposure if things go sideways on a project. So what are \u201cconsequential damages,\u201d&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/consequential-damages-when-delays-cost-more-than-time\/\">Continue reading <span class=\"screen-reader-text\">When Delays Cost More Than Time: Understanding Consequential Damages<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9],"tags":[9895,9099,224],"class_list":["post-904501","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","tag-advise-consult","tag-consequential-damages","tag-construction-contract","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>When Delays Cost More Than Time: Understanding Consequential Damages - Advise &amp; 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