Once Again: Contract Terms Matter

Businessman in front of contract

Attorney Christopher G. Hill analyzes White Oak Power Constructors v. Mitsubishi Hitachi Power Systems.

May 11, 2020
Christopher G. Hill - Construction Law Musings

I know, you’ve heard this over and over again here at Construction Law Musings: courts in Virginia will interpret a contract strictly and in a manner that gives meaning to its unambiguous terms.

A recent case out of the Eastern District of Virginia federal court, White Oak Power Constructors v. Mitsubishi Hitachi Power Systems, reinforces this point. The basic facts of the case relevant to this discussion and the Court’s opinion are these. Old Dominion Electric Cooperative (ODEC) hired White Oak Power Constructors (White Oak) to build a natural gas power plant. The contract between ODEC and White Oak provided for liquidated damages for delay and also contained a risk of loss provision making ODEC responsible for certain losses or damages due to property damage at the plant. I highly recommend that you read the facts of the case in full to get the details of the terms of these clauses.

Needless to say (or this case wouldn’t be the subject of a construction law blog), the project ran past completion date and liquidated damages were assessed to the tune of more than $50,000,000.00. The delay was alleged to have been caused in substantial part by property damage due to weather, fire, and ice among other causes.

Mr. Hill may be contacted at chrisghill@constructionlawva.com


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