“No Damage for Delay” Provisions Enforced
Kegler Brown Construction Newsletter May 1, 1996
Owners and contractors are increasingly using "no damage for delay" contractual provisions to attempt to insulate them from additional monetary claims in theevent of project delay, with the sole remedy for the delayed contractor or subcontractor being an extension of time. As "time is money" on any construction project, many associated with the industry believe this to be a particularly inequitable contract term.
Recently there was litigation concerning a "no damage for delay" provision in the Reynoldsburg City Schools contract, with two different judges on the Franklin County Common Pleas Court upholding these clauses generally. In one case, Judge Watson went so far as to rule that, even if the delays were not foreseeable by the contractor, the owner would be released from any liability resulting from its failure to respond appropriately.
The decision is currently being appealed and an amicus brief is expected on behalf of AGC —Ohio urging reversal of Judge Watson's decision granting summary judgment against the contractor.
Contractors and subcontractors are strongly cautioned to strike "no damage for delay" provisions from their contracts on private work, and with respect to publicly bid work, to consider refusing to bid or including a contingency in their prices for dealing with this increased legal risk.