A ‘Bare Bones’ Construction Contract May Preclude Parties from Adducing Evidence of Consequential Damages at Trial
In a recent opinion concerning a trial court evidentiary ruling, the New York State Supreme Court, Appellate Division, Fourth Department, addressed whether a property owner could adduce evidence at trial to support a claim for consequential damages.
07.24.25
In Vermillion v. The Roofing Guys, Inc., the property owner hired a contractor to install a new roof. During the project, a storm caused extensive water damage. Blaming the contractor’s project delays, the property owner sought damages for increased mortgage rates, higher material and construction costs, and financing disruptions—commonly considered consequential damages in the context of a construction contract. At trial, the property owner sought to introduce expert testimony as to these consequential damages. The contractor moved to preclude such evidence and to bar the recovery of consequential damages. Agreeing with the contractor, the trial court precluded the property owner from offering evidence of consequential damages at trial.
The Appellate Division unanimously affirmed the trial court, emphasizing that consequential damages must have been “reasonably contemplated” by the parties at the time of contracting. In considering this issue, the Appellate Division provided trial courts with guidance—specifically, that the court must consider “the nature, purpose and particular circumstances of the contract known by the parties . . . as well as what liability the defendant fairly may be supposed to have assumed consciously, or to have warranted the plaintiff reasonably to suppose that it assumed, when the contract was made[.]” The Appellate Division first looked to the four-corners of the contract to determine whether the parties contemplated consequential damages. The Appellate Division noted that the contract was “bare bones” (i.e., focused solely on the roofing work without mention of any other reasonably foreseeable harm associated with a breach). Next, the Appellate Division concluded that the property owner proffered no evidence (testimonial or otherwise) to support a finding that the parties contemplated consequential damages at the time of contracting. Notably, the Appellate Division rejected the property owner’s argument that the parties’ failure to waive consequential damages is, itself, evidence that the parties contemplated consequential damages.
The party seeking consequential damages must show that consequential damages were known or contemplated by the parties at the time of contracting. While the best evidence of party intent is found within the contract, testimonial and documentary evidence that the parties knew of special facts and circumstances may suffice. The lesson from Vermillion is that, in New York, a “bare bones” contract—even one without an express waiver of consequential damages—without other, contemporaneous evidence of special facts and circumstances, may prevent a party from adducing evidence to support consequential damages at trial.
While not directly addressed by the Appellate Division, the trial court rejected the property owner’s argument that the admissibility of the expert witness’s opinion as to consequential damages ought to be raised at trial and, potentially, after voir dire of the proffered expert. This argument, however, did not consider the factual support for the expert’s position, which does not require voir dire. In addition, the contractor’s rebuttal (i.e., that the motion to preclude would play a major role in the conduct of trial) was persuasive.
Co-authors Gaetano Piccirilli, partner, and C. Quincy Conrad, associate, are members of the Litigation Department and construction practice group at Klehr Harrison.