Chapter 17 - § 17.6 • DAMAGES

• Jurisdiction: Colorado

§ 17.6 • DAMAGES

§ 17.6.1-Waiver of Consequential Damages

One of the most contentious provisions of both the AIA and Consensus forms is the mutual waiver of consequential damages. See AIA Document A201-2017, § 15.1.7; ConsensusDocs 200, § 6.6 (Rev. 2017). The ASCE/EJCDC Form C-700 (2018) does not contain a waiver-of-consequential-damages provision.

§ 17.6.2-Analysis

The primary motivation for the AIA and ConsensusDocs waiver-of-consequential-damages clauses appears to have been the New Jersey Supreme Court decision in Perini Corp. v. Greate Bay Hotel & Casino, Inc.³³ In that case, the construction manager, working for a $600,000 fee, was stuck with a $14.5 million arbitration award for lost profits in favor of the owner. That result was not unlike the damages awarded in the Colorado case of Riva Ridge Apartments v. Robert G. Fisher Co.,³⁴ in which a judgment in excess of $2 million for delay damages was rendered against the construction manager.

Undoubtedly, the AIA and ConsensusDocs consequential damages waiver provisions will generate litigation. However, research has produced very few appellate cases attempting to interpret the waiver-of-consequential-damages provisions of the AIA General Conditions. This may be explained by the number of construction cases that do not reach the courts because they are arbitrated.

A 2012 Massachusetts Supreme Court case did prevent a subcontractor from recovering consequential damages from the general contractor because of a waiver-of-consequential-damages provision in the general contractor's contract with the owner that was incorporated into the subcontract.³⁵ The Wyoming Supreme Court likewise applied an AIA waiver-of-consequential-damages proviso to preclude an owner's claim for consequential damages against its contractor.³⁶ There is no uniformity in the definition of "consequential damages." Whether the wording appearing to waive "all consequential dam-ages"³⁷ may legally be limited by the specific itemization of damages waived is questionable under the doctrine of expressio unius est exclusio alterius?³⁸ The itemization itself presents a question of whether the listed damages are consequential or direct. Under typical definitions, consequential damages are those that result from, but are not the usual, natural, and foreseeable result of the injury.

Under Colorado pattern jury instructions at CJI-Civ. 30:38 (CLE ed. 2017), general damages appear to be

the amount required to compensate the plaintiff for losses that

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