The Florida Court of Appeals issued a new ruling this year holding that is great relief for architects and engineers inspecting construction projects Keystone Airpark Authority v. Pipeline Contractors, Inc., 266 So.3d 1219 (2019). The Court ruled that damages stemming from negligent inspection, monitoring, and testing were consequential damages and could not be recovered where a contract contains a waiver of consequential damages provision.
In the case, an engineering firm negligently inspected and tested the asphalt used in construction of an airplane hangar by failing to catch a structural defect, which resulted in deterioration of the asphalt and expensive repairs. The court held that the degraded asphalt was a consequential damage of the poor inspection, because it actually caused by the contractor who performed the work. Because the contract contained a waiver of consequential damages provision, the engineer was not liable for any damages caused by its negligent monitoring.
As this case demonstrates, Florida takes a narrow view on what damages are direct and what damages are not direct.For developers and contractors, this emphasizes the need to be specific about what damages are being excluded from recovery. HPW recommends avoiding language like 'consequential' and 'direct' and instead choosing the exact damages that should be recoverable in the event of a breach. Contact us to help you with your contracts.