A client asked me about a contract he was asked to sign in which consequential damages were being waived. Consequential damages are those things that cost money which arise indirectly out of a failure of a party on a construction project. They can include:
- loss of use
- loss of rent
- loss of profit
- loss of bonding capacity
- extended overhead
- extended equipment rental fees
- increased material costs
Note that this is not an exhaustive list, and other consequential damages may be applicable depending on the project.
The standard industry contracts all have at least some waiver of consequential damages, as noted in this chart.
Bottom line: waiver of consequentials can be a good thing or a bad thing, but you will not know which when you are signing on the dotted line.
Just make sure that if there is a waiver, that it is mutual on both sides. Good luck, and “be safe out there”
Your turn. Have you ever waived your right to consequentials? Horror story to share about paying someone else’s costs? Share in the comment section.Dollar Photo (c) sivlen001. Chart (c) Melissa Brumback