Compromising On Consequential Damages

The potential loss to the owner if something goes wrong during construction (e.g. business interruption, loss of production...) is often far greater than the cost of construction. Owners reasonably want to hold contractors accountable for delays or other events in the contractor's control that may affect the owner's bottom line. But contractors reasonably don't want to take on a risk that greatly exceeds the value associated with a particular contract. For a time it was common to see broad exclusions of consequential damages in industrial construction contracts. Sophisticated contractors in Alberta were simply unwilling to accept a risk of the magnitude likely to be associated with the delay or shutdown of a revenue-generating asset.