No-damage-for-delay Clauses are commonplace in construction contracts. But, have you ever read one and wondered if they are enforceable? Courts across the country have consistently enforced them and these clauses will severely limit your ability to recover damages caused by delays, even if the delays were not caused by you.
What is a No Damage for Delay Clause
A no-damage-for-delay clause is just that, a clause that explains that if the project is delayed, you will only be allowed more time to complete the work—you will not be compensated for the extra time you spend on the project. Typical clauses look like:
No payment or compensation of any kind shall be made to Contractor for damages because of hindrance or delay from any cause in the progress of the work, whether such hindrances or delays are avoidable or unavoidable
Contractor agrees that it may be subject to delay in the progress of the work and that the sole remedy for such delay shall be an extension of time
Are No Damage for Delay Clauses Enforceable?
Generally, yes, these clauses are enforceable. Courts interpret these clauses like any other contract clause and look to the plain language. If the language is like the provisions set forth above, a court will enforce the clause and deny requests for additional compensation. So, if you make a request for delay damages, and the contract has a no-damage for delay claim, a court may very well rule against you, finding that your only recourse is more time to complete the project.
There are, however, a few exceptions to enforcing these clauses. Courts have found that if the owner or an upstream contractor’s unreasonable conduct caused the delay, the clause may not be enforceable. Courts will also refuse to enforce these clauses where there has been concealment, misrepresentation, fraud, bad faith or malicious intent.
Take Away: No-damage-for-delay clauses are enforceable and can severely limit, if not eliminate, your claim for delay related damages. If you have questions about whether your construction contract contains a no-damage-for-delay clause, we recommend you consult with an experienced construction attorney.