construction damages

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In construction disputes, one of the most important issues is whether the party claiming damages can adequately prove its damages at trial. Under Florida law, the burden is on the party seeking damages to prove its damages with a reasonable degree of certainty. While difficulty proving your damages may not be a bar to recovery, the award of damages cannot be based on mere speculation or guesswork. (For more on the burden of proof for construction damages under Florida law, click here.)

Florida law also specifies a “time of breach” standard that requires a party seeking damages based on defective construction work to calculate its damages as of the date of the breach of contract. A recent Florida appellate decision demonstrates the importance of proving damages under the time of breach standard.Continue Reading Court Reverses Award of Damages to Owners Due to Lack of Evidence

To win on a breach-of-contract claim, the party asserting the claim must prove that the other party to the contract caused the non-breaching party to incur damages. In construction disputes, the non-breaching party (e.g., a contractor or subcontractor) will often claim that it incurred lost profits due to the other party’s breach.

For example, if an owner wrongfully terminates a contractor, the contractor may be entitled to the profit that it was going to make on the project but for the owner’s termination of the contract. But to obtain those lost profits, the contractor will have to offer supporting evidence.Continue Reading How to Prove Lost Profits in Construction Disputes

If a contractor is unable to perform its work as efficiently as expected due to the actions of other project participants, the contractor may incur loss of productivity damages. There are many ways to price those types of damages. Some methods are better than others, but the least accepted method is the total cost method.

Under the total cost method, the contractor shows the amount it cost to complete its work and subtracts the contract amount. For example, if the contract amount was $10 million, but it cost the contractor $15 million to complete its work, the contractor might claim that it is owed $5 million.

Courts frequently reject the use of the total cost method because it does not take into account damages that are the result of the contractor’s unrealistic bid or the contractor’s own improper performance of its work.Continue Reading Subcontractor’s Modified Total Cost Claim Allowed to Proceed to Trial

There are two types of differing site condition claims–Type I and Type II claims. Generally, a contractor may make a Type I differing site condition claim where the contractor encounters a subsurface or latent physical condition at the project site that differs materially from the conditions indicated in the parties’ contract.

Under a Type II claim, a contractor may assert a DSC claim where there are unknown and unusual physical conditions at the project site that differ materially from those ordinarily encountered and generally recognized as inherent in work of the character provided for in the parties’ contract.

Both Type I and Type II DSC claims can be difficult to prove. Last week, after having a seven-day trial, a federal court rejected a subcontractor’s $2.4 million DSC claim in Phillips & Jordan, Inc. v. United States.Continue Reading Federal Court Rejects Subcontractor’s $2.4 Million Differing Site Condition Claim