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No Prime Liability = No Pass-Through

Client Alert | less than 1 min read | 05.06.08

The Court of Federal Claims in Harper/Nielsen Dillingham, Builders v. U.S. (Apr. 29, 2008) denied a contractor's suit against the government in which it sought to pass through subcontractor claims for cost increases caused by government delays. The court acknowledged that the "Severin doctrine" allows such pass-through claims when the prime contractor is potentially liable to its subcontractor for the damages, but here found the prime could not be liable because the subcontract included an "iron-bound bar" against such liability due to a "no damage for delay" clause.

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Client Alert | 4 min read | 08.13.26

Supreme Court Confirms Contractual Loss of Bargain Without Repudiatory Breach

English law has long treated the choice between terminating for repudiatory breach and exercising a contractual termination right as consequential. Under the Financings[1] causation principle, a party exercising a contractual right for a non-repudiatory breach could recover losses accrued to the date of termination — but nothing more. Loss of bargain was out of reach unless the breach went to the root of the contract. A practical workaround, confirmed in Lombard,[2] was to designate the relevant obligation as a condition, elevating any breach to repudiatory status, but that device carries significant strategic risk if the termination is later found to have been wrongful....