Court Grants Contractors Damages for Delays Caused by State, Denies Liquidated Damages where State Unable to Establish Extent of Fault of Contractors

Buckley & Co. v. State, 356 A.2d 56, 140 N.J. Super. 289 (N.J. Super. Ct. Law Div. 1975)

In this case, the court adjudicated a claim by two construction companies against the State regarding the construction of Route 78.  The project, namely the creation of a section of the road that involved various bridge constructions as well as electrical, drainage and related work, was finished 87 days later than was provided in the contract and various change orders and 564 days later than the original completion date.  Consequently, the contractors filed suit for delay damages which included various overhead expenses and wages for employees.  The contractors also sought the return of monies withheld by the Department of Transportation as “liquidated damages” for the delay.  The State contended that the delays were the contractors’ fault, that the reasons for the delays given by the contractors did not occur, and that claims for costs were barred by no-damages clauses included in the contract.  The court, concluding that some of plaintiff’s losses were the result of breach by the State, allowed recovery for those losses accordingly.  The court declined to allow the State to withhold liquidated damages where the delay could be attributed actions and inaction by both parties as well as circumstances beyond either party’s control.  The court also held that the construction company had standing to assert claims on behalf of subcontractors.

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