ESCAPING DAMAGE LIMITATIONS

Construction claims arise typically out of defective plans, an unforeseen work stoppage, encountering an unknown condition, or some combination thereof. More often than not, such claims are settled under clauses contained in the contract. However, most construction contracts attempt to limit or restrict the contractor's right to recover items such as delay damages, home office overhead, and profit. When the contractual remedies prove insufficient to make the contractor whole, looking outside of the contract may result in finding new avenues of relief and avoidance of the contractual limitation on remedies. This concept is illustrated in the case of Formosa Plastics Corp., USA v. Presidio Engineers and Contractors, Inc., 960 S.W.2d 41 (Tex. 1997). This case demonstrated one possible method of avoiding contractual limitations on damages: establishment of an independent tort.