North Carolina Court of Appeals Distinguishes “Equitable Adjustment” Clause From “No-Damages-For-Delay” Clause
It is not unusual to see a “no-damages-for-delay” provision in a construction contract. But what happens if the contract also includes a separate provision entitling one party to an equitable adjustment for cost increases incurred after the project’s scheduled completion date? In Southern Seeding Service, Inc. v. W.C. English, Inc., 719 S.E.2d 211 (N.C. App. 2011), the Court of Appeals held that the subcontractor was entitled to the equitable adjustment, and that the equitable adjustment did not constitute “delay damages.”
On remand and following a bench trial, the trial court found that the subcontractor was entitled to an equitable adjustment to the subcontract to compensate the subcontractor for its actual costs incurred after the scheduled completion date. The trial court also ruled that the contractor had unreasonably refused to resolve the matter. The court then awarded the subcontractor attorneys’ fees under the North Carolina Little Miller Act. The North Carolina Court of Appeals affirmed and held that the subcontractor was entitled to the compensatory damages awarded by the trial court as well as the attorneys’ fees awarded. Southern Seeding Service, Inc. v. W.C. English, Inc., 735 S.E.2d 829 (N.C. App. 2012).