Opinion ID: 1288968
Heading Depth: 1
Heading Rank: 3

Heading: Delay caused by fraud, misrepresentation, or other bad faith.

Text: The most widely recognized exception to the enforceability of a no-damage-for delay clause is fraud, misrepresentation or bad faith. 74 A.L.R.3d at 215-216, § 7(b). Of those cases addressing this exception, it appears to have been adopted in all but one jurisdiction. See Owen Constr. Co. v. Iowa State Dept. of Transp., 274 N.W.2d 304 (Iowa 1979); Jensen Constr. Co. v. Dallas County, 920 S.W2d 761 (Tex.App.1996); Newberry Square Development Corp. v. Southern Landmark, Inc., 578 Sold 750 (Fla.1991); J & B Steel Contractors, Inc. v. Iber & Sons, 162 111.2d 265, 205 Ill.Dec. 98, 642 N.E.2d 1215 (1994); White Oak Corporation v. Department of Transportation, 217 Conn. 281, 585 A.2d 1199 (Conn.1991); State Highway Admin. v. Greiner, 83 Md.App. 621, 577 A.2d 363 (1990) (all recognizing exception for fraud or bad faith). But see Marsch v. Southern N.E.R. Corp, 230 Mass. 483, 120 N.E. 120 (1918) (declining to adopt fraud exception). Clearly, fraud, misrepresentation and bad faith in performance of one's contractual duties would give rise to a violation of the implied obligation of good faith and fair dealing. See O'Quinn v. Beach Associates, 272 S.C. 95, 249 S.E.2d 734 (1978) (recognizing that a contract may be avoided on grounds of fraud). Accordingly, we find that adoption of this exception is a logical extension of South Carolina law and join the majority of juris dictions in adopting this exception.