No Damage for Delay? No Problem: Exceptions to the Enforceability of No Damage for Delay Clauses

Man looking at watch with late expression

This article provides an overview of no-damage-for-delay clauses and the exceptions to enforcement of these clauses.

October 18, 2021
Chris Broughton, Jones Walker LLP - ConsensusDocs

Introduction:

Under a no-damage-for-delay clause, the owner is not liable for any monetary damages resulting from delays on the project. In lieu of monetary recovery, the contractor’s remaining remedy is a non-compensatory time extension. These clauses are common at the contractor-subcontractor interface as well.

While no-damage-for-delay clauses are enforced in most jurisdictions, some states, either by statute or case law, have limited the enforceability of no-damage-for-delay clauses. Other states have also limited the enforceability of these clauses on state government contracts, and a select few have outlawed them on all projects regardless if they are publicly or privately owned. Additionally, for subcontractors on federal projects, the Miller Act may provide a way to avoid no-damage-for-delay and recover against the general contractor’s payment bond.

This article provides an overview of no-damage-for-delay clauses and the exceptions to enforcement of these clauses. However, due to the consequences of a no-damage-for-delay clause, it is important to know the terms of your contract and the law that governs your project.

Mr. Broughton may be contacted at cbroughton@joneswalker.com



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