J.A. Jones Construction Co. v. Lehrer McGovern Bovis, Inc.
89 P.3d 1009 | Nevada Supreme Court | 2004
What This Case Means for Subcontractors
J.A. Jones, a concrete subcontractor, sued the construction manager for delays on a Las Vegas casino project. The subcontractor had negotiated a lower bid ($7.4M instead of $8.4M) based on the contractor's promise to handle site prep and reduce the work schedule. The Nevada Supreme Court ruled that 'no damages for delay' clauses cannot shield contractors from liability when they act in bad faith, commit fraud, actively interfere with the work, or abandon the project. The case was sent back for a new trial because the lower court wrongly prevented the jury from considering these exceptions.
Key Takeaways
- •Don't accept 'no damages for delay' clauses without understanding they have limits—bad faith, fraud, active interference, and project abandonment can override them
- •Document everything the contractor promises to do (site prep, schedule reductions, cost savings) because breaking those promises may constitute bad faith or active interference
- •If a contractor causes delays while also failing to perform its own obligations, you may have claims beyond the contract itself, including quantum meruit (payment for work performed)
No damages for delay clauses are subject to exceptions based on bad faith and active interference.
Frequently Asked Question
Can a 'no damages for delay' clause stop me from getting paid for delays caused by the contractor's bad behavior?
No. Nevada courts have ruled that 'no damages for delay' clauses don't apply when the contractor acts in bad faith, commits fraud, actively interferes with your work, or abandons the project. If the contractor breaks promises it made to reduce your costs or schedule, that can be bad faith. Always document what the contractor promised and how it failed to deliver.
Related Cases
Atlantic Marine Constr. Co. v. United States Dist. Court for Western Dist. of Tex.
Forum-selection clauses in federal contracts are enforced through §1404(a) transfer motions, not §1406(a) dismissals, and must be given controlling weight except in exceptional circumstances.
Texas Natural Resource Conservation Commission v. IT-Davy
Sovereign immunity bars a contractor's breach-of-contract suit against a state agency absent express legislative consent; neither the agency's conduct, contract terms, nor general statutes waive immunity from suit.
Martin K. Eby Construction Company, Inc. v. Dallas Area Rapid Transit
A contractor must exhaust administrative remedies established by a regional transportation authority before pursuing breach of contract claims in court, even when the authority lacks governmental immunity from suit.
Edwin P. Harrison, and United States of America, Party in Interest v. Westinghouse Savannah River Company
The Fourth Circuit reversed the district court's dismissal, holding that the False Claims Act broadly reaches false statements made to obtain government contract approval, not just false payment claims themselves.
General Services Commission v. Little-Tex Insulation Co.
The State does not waive sovereign immunity from breach-of-contract suits by accepting contract benefits; Chapter 2260's administrative procedure is the exclusive remedy for such claims.
Green International, Inc. v. Solis
No-damages-for-delay clauses in construction contracts need not meet the conspicuousness requirement established in Dresser for exculpatory negligence clauses, and such clauses are enforceable to bar delay damages absent specific exceptions.