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Owner's Interference with Contractor's Performance

September 12, 2014

Each party to a construction contract is under a continuing duty, if not express then implied, to refrain from impeding or interfering with the other party's performance. As far as the owner's duty, he must not only not interfere with a contractor's performance but he also has the positive duty to facilitate the contractor's work where possible. Should the owner fail in this regard, he may be liable to the contractor for delay damages. However, damages will be denied if the delay is attributable to events beyond the control or responsibility of the owner. When a contractor seeks delay damages against the owner, the court's threshold question will be whether the delay was within the owner's control. If the answer is "no," then damages will be disallowed.

 

The foundation for the owner's duty not to interfere with the contractor's performance is the principle in construction contracts that "time is of the essence." The owner is expected to do all that he can to promote the timely completion of the project. If he is remiss in doing so, the contractor may have a viable claim. Examples of actions leading to the imposition of damages against the owner include the owner who unnecessarily restricted access to the job site, the owner who was completely inept in coordinating the work of the various trades on the project, and the owner who provided the contractor with defective plans.

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