Appeals Court Overturns Punitive Damages for Breach of Contract

A win for the Construction Advocacy Fund-Financed, AGC-backed lawsuit.

In a favorable decision issued March 11, the Tennessee Court of Appeals agreed with AGC of America and AGC of Tennessee—whose legal efforts were backed by the Construction Advocacy Fund—that a subcontractor cannot sue a general contractor on one and the same set of facts for not only breach of contract (seeking to recover its purely economic losses) but also in tort for misrepresentation (seeking compensatory and punitive damages).

The court of appeals ruled that the subcontractor’s ability to recover monetary damages was limited by its contract with the general contractor. As such, the court vacated the lower court’s award of punitive damages because they were not permitted under the contract.

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