Daniel International Corporation, Cross-Appellant v. Fischbach & Moore, Inc., Cross-Appellees
916 F.2d 1061 | Court of Appeals for the Fifth Circuit | 1990
What This Case Means for Subcontractors
Daniel International sued electrical subcontractor Fischbach & Moore over delays on a Texas prison construction project with strict deadlines. The district court wrongly removed the case from the jury calendar three months before trial, and the appeals court reversed and ordered a new jury trial. The court also ruled that a contractually agreed 10% profit margin deduction for delays is a valid liquidated damages clause, not an unenforceable penalty.
Key Takeaways
- •You have a right to a jury trial in contract disputes—courts cannot arbitrarily strip that right by removing cases from the jury calendar without good cause.
- •Liquidated damages clauses tied to a specific profit margin percentage are enforceable if both parties agreed to them upfront, even if they result in significant financial consequences.
- •Strict contract language requiring written notice of delays within five days and prohibiting weather extensions will be enforced—document everything and meet notice deadlines or lose your right to claim extra time.
Contractually stipulated profit margin was valid liquidation of damages, not penalty.
Frequently Asked Question
Can a contractor enforce a liquidated damages clause based on a percentage profit margin reduction if I miss deadlines?
Yes, if both parties agreed to it in the written contract. Courts will enforce a contractually stipulated profit margin as valid liquidated damages, not a penalty, as long as it was a reasonable estimate of actual damages at the time the contract was signed. Make sure you understand and negotiate these terms before signing.
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