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In Atlantic Coast Mechanical v. R.W. Allen Beers Construction, 592 S.E.2d 115 (Ga. 2003), the Georgia Court of Appeals reversed a trial court that, relying in part on a no damages for delay clause, had thrown out a subcontractor's suit that sought compensation for increased labor costs allegedly incurred due to the actions of the general contractor (GC).

In short, even though the parties' subcontract barred delay claims, and even though the general contractor had the right to sequence the work and modify the schedule, the Court of Appeals interpreted the subcontract to only bar additional compensation for delays and hindrances the subcontractor could have foreseen.

The case

In May 1996, Atlantic Coast Mechanical ("subcontractor") was hired by Beers Construction ("general contractor") to perform heating, ventilation, air conditioning, and plumbing work for a construction project called the 'Children's Medical Center' in Augusta, GA. In April 1998, the subcontractor submitted a request for an equitable adjustment (REA) for increased labor costs it claimed to have incurred because of the GC's disruptions. The general contractor denied the claim and asked the subcontractor to withdraw its REA.

Instead, the subcontractor sued, claiming that the general contractor had forced it to perform work in a "radically different manner, method, and sequence" than it had originally contemplated when bidding the job.

The subcontractor claimed that it was unable to rough-in overhead piping and equipment with rolling scaffolds and manlifts, as it originally planned, because the concrete work was late and out of sequence. Further, when the work areas finally became accessible, the subcontractor alleged that the general contractor required it to accelerate by demanding that it double the size of its crews and work those crews overtime.