CACI 4543 Contractor’s Damages for Breach of Construction Contract—Owner-Caused Delay or Acceleration
California Civil Jury Instructions CACI
4543 Contractor’s Damages for Breach of Construction Contract—Owner-Caused Delay or Acceleration
[Name of plaintiff] claims that [name of defendant] breached the parties’ contract by [delaying/accelerating] [name of plaintiff]’s work, causing [name of plaintiff] harm. If you find that [name of defendant] [delayed/accelerated] the work, you may award damages to [name of plaintiff] for all harm caused by the [delay/acceleration], including the following:
1.Expenditures that [name of plaintiff] made for labor, services, equipment, or materials that [he/she/nonbinary pronoun/it] otherwise would not have made but for the [delay/acceleration];
2.Overhead that [name of plaintiff] otherwise would not have incurred but for the [delay/acceleration]; and
3.Increase in the cost of labor, services, equipment, or materials already required under the contract that resulted from the [delay/acceleration].
Directions for Use
This instruction should be used in an action by the contractor against the owner for economic loss incurred because the owner either delayed or demanded acceleration of the work.
For additional instructions on contract damages generally, see CACI No. 350 et seq. in the Contracts series, particularly CACI No. 351, Special Damages.
Sources and Authority
•Unreasonable Delay. Public Contract Code section 7102.
•“Delay damages are a common element recoverable by a party aggrieved by the breach of a construction contract.” (JMR Construction Corp. v. Environmental Assessment & Remediation Management, Inc. (2015) 243 Cal.App.4th 571, 585 [198 Cal.Rptr.3d 47].)
•“A subcontractor who is responsible for delaying the progress of a construction project may be held liable for delay damages incurred by the general contractor or by another subcontractor.” (JMR Construction Corp, supra, 243 Cal.App.4th at p. 586.)
•“ ‘A building contractor whose performance is delayed by the owner may have increased overhead and fixed costs resulting from a delay and may suffer labor and material cost increases or loss of labor productivity due to delays for all of which he or she would be entitled to damages.’ Extended home office overhead is one type of delay damages for which a contractor may seek recovery.” (JMR Construction Corp, supra, 243 Cal.App.4th at p. 586, internal citation omitted.)
•“Overhead expense allocable to the period of delay is allowed to the extent the evidence shows an increase in overhead because of the breach; or where other jobs, but for the delay, would have been obtained to absorb such overhead.” (A. A. Baxter Corp. v. Colt Industries, Inc. (1970) 10 Cal.App.3d 144, 158 [88 Cal.Rptr. 842], internal citations omitted.)
•“We conclude the trial court did not err in applying the Eichleay formula as a legally permissible method of determining JMR’s home office overhead damages. We base this conclusion upon the expert evidence presented at trial, the general recoverability of extended home office overhead as an element of delay damages, and the federal courts’ general acceptance of the Eichleay formula.” (JMR Construction Corp, supra, 243 Cal.App.4th at p. 587.)
•“The federal courts have identified three Eichleay requirements. ‘[T]he contractor [must] establish: (1) a government-caused delay; (2) that [the contractor] was on “standby”; and (3) that [the contractor] was unable to take on other work. [Citation.]’ ” (JMR Construction Corp, supra, 243 Cal.App.4th at p. 588.)
•“[A] contractor cannot recover on a claim for unabsorbed office overhead where it is able to meet the original contract deadline or finish early despite a government-caused delay. An exception applies where the contractor demonstrates from the outset an intent to complete the work early, a capacity to do so, and a likelihood of early completion but for the government’s delay. Application of the three-prong test requirement … , however, is required only where the contractor finishes the work by the original specified contract completion date or earlier.” (Howard Contracting, Inc. v. G.A. MacDonald Construction Co. (1998) 71 Cal.App.4th 38, 54–55, [83 Cal.Rptr.2d 590].)