No-Damages-for-Delay Clauses and Their Limits
These clauses bar recovery of delay costs — but courts recognize important exceptions, and some states limit or void them, especially on public work.
Key takeaways
- A no-damages-for-delay clause limits the contractor's remedy for delay to a time extension, not money.
- Common judicial exceptions: active interference, bad faith, fraud, abandonment, and delays not contemplated by the parties.
- Some states restrict or void these clauses by statute, particularly on public projects.
- The clause is most punishing when the delay was caused by the owner or contractor, not the sub.
- Strong notice-of-delay procedures are essential to preserve any claim that survives the clause.
- Seek the right to both time and money for excusable, compensable delay.
How the clause works
A no-damages-for-delay clause provides that if the contractor is delayed, its sole remedy is an extension of time — it cannot recover the added labor, equipment, extended general conditions, and home-office overhead the delay caused. On a project that runs months long, those time-related costs can be enormous, and the clause shifts all of them onto the delayed party.
These clauses are especially punishing when the delay is caused by the owner or the general contractor — late access, slow responses to submittals, design changes, or out-of-sequence work. The contractor absorbs costs created by others, with nothing but a later completion date to show for it.
The judicial exceptions
Even where enforceable, courts have long carved out exceptions, because enforcing the clause against every conceivable delay can produce results the parties never intended. Recovery may still be available where the delay results from the other party's active interference or willful obstruction; from bad faith, fraud, or gross negligence; from delays so unreasonable in length that they amount to abandonment of the contract; or from delays not within the contemplation of the parties when they signed.
These exceptions are fact-intensive and applied with varying enthusiasm from state to state, but they mean a no-damages-for-delay clause is rarely the absolute bar it appears to be. A well-documented owner-caused delay that crosses into interference or bad faith may support a damages claim despite the clause.
Statutory limits
Some states have stepped in by statute to limit or void no-damages-for-delay clauses, particularly on public projects, treating broad delay-damage waivers as contrary to public policy. Others limit the clause's reach to delays the contractor should have anticipated, leaving extraordinary or owner-caused delays compensable.
Because the enforceability and the exceptions both turn on the governing law, the same clause can be a near-complete shield in one state and a porous one in another. The review has to start with the jurisdiction and the project type.
Notice is what preserves the claim
Whatever the clause says, the contractor's ability to recover delay damages — or even to obtain the time extension the clause does allow — usually depends on giving prompt written notice of the delay and its cause. Most contracts require notice within a short window, and failure to give it can waive the claim independently of the no-damages-for-delay clause.
Practically, that means the field has to recognize delay events as they happen, document the cause and the impact, and trigger the contractual notice. The strongest legal exception is worth little if the underlying claim was waived for lack of notice.
The review position
Seek an equitable adjustment of both time and price for excusable, compensable delay caused by the owner, contractor, or parties for whom they are responsible. Where a full strike of the clause is not achievable, narrow it: preserve recovery for owner-caused or contractor-caused delay, for active interference, and for delays beyond a reasonable threshold, even if the contractor accepts the clause for ordinary, unforeseen delays.
Pair whatever survives with airtight notice procedures, so that any claim the law would allow is not lost to a missed deadline.
This article is general information about construction contracting and law, not legal advice. Construction law varies significantly by jurisdiction and project. Consult qualified counsel about your specific contract and circumstances.
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