The waiver of consequential damages in construction contracts involves both parties agreeing not to pursue claims for indirect losses, such as loss of income or productivity, resulting from a breach of contract. These damages are often difficult to quantify and can be significant, potentially affecting a contractor's business or an owner's financial standing. By waiving such claims, parties aim to reduce uncertainty and potential disputes.

However, this waiver must be carefully drafted to avoid ambiguity. Courts may interpret the provision differently based on its wording and related contract clauses, such as indemnity or liquidated damages provisions. Clear definitions and specific language are crucial to ensure the waiver is enforceable and understood by all parties, including subcontractors.Click here to read more.