“No Damage for Delay” Clause Imposed Under Odd Facts
Kegler Brown Construction Newsletter November 1, 2000
At least prior to the Fairness in Construction Contracting Act, which became effective to contracts dated on or after September 30, 1998, "no damage for delay" clauses are generally enforceable if unambiguous - but there are so many exceptions to the general rule that contractors are often able to recover delay damages despite such clauses.
A recent Court of Appeals decision from Cleveland upheld a "no damage for delay" clause and barred a contractor's recovery for unforeseen utility lines and resulting costs. Digioia Bros. Excavating v. Cleveland (1999), 135 Ohio App. 3d 436.
In the Digioia case, two very odd facts were present which normally do not occur. First, the City had already paid the contractor for the differing site conditions in change orders. Second, the contractor's estimator had included additional costs in his bid to cover the risk of unforeseen utility lines. The Court held that the contractor had therefore not relied upon the information in the arguably erroneous plans and specifications.
If the contractor had testified that he had relied upon the site information contained in the plans and specifications, and did not include a contingency in his bid for such utility interferences, there would likely have been a different result.