Court Opinion

ID: 9793801
Source: CourtListenerOpinion
Date Created: 2023-08-31 02:53:16.94273+00
Date Added: 2024-06-11T08:06:56.393653
License: Public Domain

BOOCHEVER, Chief Justice,
dissenting in part.
I dissent from the portion of the opinion which holds that the state cannot recover both the additional costs of completing the contract and liquidated damages for delay. The majority opinion concludes that “in the event of a proper exercise of the right of termination by the State, the contractor becomes liable under the terms of the contract for both actual and liquidated damages.” I agree with the majority that this is the only reasonable interpretation of the contract language. I do not find, however, that provision for both liquidated damages and the additional costs of completing the contract results in double recovery and makes the terms of the contract invalid for policy reasons.
The liquidated damages are included to compensate the state for delays in completing the contract. Since these damages would be very difficult to compute, the use of a reasonable sum as liquidated damages is permissible. The cost of delay, however, is distinct from actual costs incurred by reason of the state having to complete the contract, as the following example illustrates.
If a contractor refuses or fails to prosecute the work so that the state is required to complete the contract, the state is entitled to any additional costs of completion.1 Such costs would be incurred if the original contractor had underbid the contract. Moreover, if by the time that the state took over the work, it was so far behind schedule that completion within the specified time was impossible, the state would also be enti-tied to damages for delay. If, however, the work had been on schedule and could be completed within the specified time, the damages would be limited to the difference between the cost of completion and the contract price. The liquidated damages provision under such conditions would not be applicable because there was no delay.
I see no policy considerations that should prohibit parties from agreeing to compensation for both items of damages when facts indicate that separate damages have been suffered in completing the contract and by reason of delay.

. The contract specifies:
If the Contractor refuses or fails to prosecute the work, or any separable part thereof, with such diligence as will insure its completion within the time specified in this contract, or any extension thereof, or fails to complete such work within such time, the Contracting Officer may, by written notice to the Contractor terminate his right to proceed with the work or such part of the work as to which there has been delay. In such event the Contracting Officer may take over the work and prosecute the same to completion, by contract or otherwise, the Contractor and his sureties shall be liable to the State for any excess cost occasioned the State thereby, (emphasis added)