General Damages in Construction Contracts

General damages in construction contracts refer to damages that are not associated with concrete or measurable losses. They are intangible losses that result from a breach of contract. These damages are awarded to compensate the non-breaching party for the negative impact the breach has had on their business or property, reputation and other intangible losses such as disruption of work or inconvenience.

Construction contracts are unique contracts that involve the completion of a specific project or task. These projects are usually complex and require a significant investment of time and money. Therefore, it is common for parties to include clauses in the contract that detail the consequences of breaching the agreement.

When there is a breach of contract, the non-breaching party is entitled to recover damages. There are two types of damages in construction contracts: actual damages and general damages. Actual damages are measurable losses that result directly from the breach. For example, if a contractor fails to complete a project on time, the owner may incur additional costs to hire another contractor to finish the job. These costs are considered actual damages.

General damages, on the other hand, are intangible losses that result from the breach. For instance, a breach of contract may lead to delays, disruptions, and other inconveniences that can impact the owner`s business operations. These losses are difficult to quantify, but they are still real and deserving of compensation.

Examples of general damages in construction contracts include lost profits, lost opportunities, loss of reputation, and loss of business goodwill. For instance, if the breach of contract causes a delay in completion of a project, it may result in lost profits for the owner because they cannot use the completed work as intended. The delay may also result in damages to the owner`s reputation if the project is part of a larger development or business venture.

In conclusion, general damages in construction contracts are intangible losses that result from a breach of contract. These losses may be difficult to quantify, but they are real and deserving of compensation. It is vital to have a well-drafted contract that outlines the consequences of breaching the agreement to prevent any misunderstandings and clearly define the parties` rights in the event of a breach.