NO DAMAGE FOR DELAY / ACCELERATION CLAUSE VOID IN OHIO

By Thomas R. Yocum, Esq.

            In Cleveland Construction v. Ohio Public Employees Retirement System, 2008 – Ohio – 1630; 2008 WL 885841 (Ohio App.10^th Dist., April 3, 2008), the Court held that the contract provision which purported to prohibit recovery of acceleration damages was void and unenforceable.  The Franklin County Court of Appeals addressed the relationship between delay claims and acceleration claims.  The Court observed that delay and acceleration claims are two sides of the same coin. 

At first glance, [accelerate and delay] appear to be antonyms.  However, in this case it is more proper to view them as two sides of the same coin***.  The time compression that caused the acceleration*** was itself caused by delay. 

            The Court in Cleveland Construction reached a completely different result regarding interpretation and application of nearly identical contract provisions than the Ohio Supreme Court did in Dugan & Meyers Construction Co., Inc. v. Ohio Dept. of Administrative Services, 113 Ohio St.3d 226, 864 N.E.2d 68 (2007). The Court in Cleveland Construction based its opinion on application of Revised Code 4113.62 which was not in effect at the time of the Dugan & Meyers and Ohio State University contract.  Ohio Revised Code 4113.62 became effective in 1998; whereas, the Dugan & Meyers and Ohio State University Contract was entered into in 1997. 

            As the Court in Cleveland Construction has now demonstrated, the enactment of Revised Code 4113.62 effectively nullifies, in large part, the Supreme Court’s opinion in Dugan & Meyers, since a foundation of that opinion was the premise that “no damage for delay” clauses were valid and enforceable in construction contracts in Ohio (which they no longer are).