When Are “No Damage for Delay” Provisions Enforceable?
Kegler Brown Construction Newsletter September 1, 2007
As everyone associated with the construction industry knows, on any construction project "time is money." In view of increasing construction claims, more owners and contractors are attempting to draft no damage for delay provisions in their contracts and subcontracts respectively to help insulate themselves from additional expense on projects where completion is delayed.
Generally, no damage for delay ("NDFD") provisions will be strictly construed. In applying the most common exception, a court will look to see if the specific delays encountered were of the type that would be within the contemplation of the parties at the time the contract was entered into. If the specific delay at issue is of the type that would not be within the contemplation of the parties when the contract was made, then the clause will not serve to preclude the award of damages to the contractor for the delay.