THE "TOTAL COST" CLAIM: CONTRACTOR'S CURE-ALL OR CURSE?

This article reviews several California cases in which contractors have sued for recovery of breach of contract damages on the basis of total costs incurred in lieu of isolated, precisely defined, well-documented claims. While there is a large body of law permitting the recovery of such damages, the plaintiff contractors ignore not only an equally large number of decisions rejecting the total cost approach which is really intended for extreme cases, but the stringent criteria for permitting total cost recovery. The plaintiff must prove: 1. The nature of the losses makes it impossible or impracticable to determine them with reasonable degree of accuracy. 2. The plaintiff's bid was realistic. 3. The plaintiff's actual costs were reasonable. 4. The plaintiff was not responsible for the added expenses. As a result, the likelihood in most cases is that blanket recovery of huge damages will be rejected for lack of causation. Unfortunately, the courts have been unwilling to do this in the pleasing or pretrial stages, resulting in a burdensome expense to the defendant, i.e. the California taxpayer.