Claims for Hindrance or Obstruction Are Not Barred by a “No Damage for Delay” Clause.
Kegler Brown Construction Newsletter September 1, 2007
The Sixth Circuit in John E. Green Plumbing v. Turner Construction Co., 742 F.2d 965 (6th Cir. 1984), in determining whether or not the clause applied to the facts of that case, made an important distinction between the terms hindrance and delay. In the Green case, the clause at issue forbade damages resulting from the contractor being "delayed in the commencement, prosecution, or completion of the project." The clause made no mention of "hindrance" and thus Green argued that the clause, "strictly construed, only bars delay damages and not other kinds of damages, such as damages for hindering work on the project." The court agreed with Green and went on to define delay as meaning "time lost where work cannot be performed because essential supplies have not been delivered or necessary preliminary work has not been performed." Thus, the court concluded that delay damages "refers simply to the cost of an idle workforce."
Applied to the facts of that case, the NDFD clause did not apply where the contractor suffered damages from obstacles created by the construction manager. Examples include, the construction manager allowing another contractor to brick up an area that Green needed access to and failure of the manager to ensure that temporary heat was provided. Thus, an action for damages arising out of hindrances and obstructions created by the construction manager (as opposed to delays) was not precluded by the NDFD provision that only addressed "delay."
NDFD provisions place contractors at risk that they will be unable to recover damages for delay, even if caused through no fault of their own, but whether a NDFD provision is legally effective will likely hinge on the particular facts of that case.