No-Damage-for-Delay Clause
A clause that gives the contractor more time for a delay, but no money.
Quick Answer
A no-damage-for-delay clause limits a contractor's remedy for delays, including many caused by the owner, to an extension of time with no additional compensation. It shifts the cost of delay, such as extended general conditions and idle equipment, onto the contractor. Courts often enforce it, but many jurisdictions recognize exceptions or restrict it on public work.
The Full Picture
No-damage-for-delay clauses exist because owners want cost certainty. Delay claims can be large, since a stalled project keeps paying for supervision, equipment, bonds, and overhead. By limiting the contractor to a time extension, the owner avoids open-ended exposure for delays it may cause or cannot control.
Mechanically, the clause classifies delays as excusable but non-compensable. The contractor gets more time, so it is protected from liquidated damages, but it cannot recover the extra cost of being on site longer. Some clauses apply to all delays; others carve out specific causes. It often appears alongside notice requirements and interacts with force majeure and suspension provisions.
Enforcement varies. Courts in many states enforce the clause as written but recognize exceptions, commonly for delays not contemplated by the parties, delays so long they amount to abandonment, and delays caused by the owner's bad faith, fraud, or active interference. Several states restrict or void these clauses on public contracts by statute. Federal contracts take a different approach, with FAR 52.242-14 allowing a price adjustment for unreasonable owner-caused suspension of work.
In preconstruction, a no-damage-for-delay clause is a risk to price. The estimating team should identify it, assess how likely owner-caused delays are (incomplete design, permit risk, owner-furnished equipment), and either carry contingency for extended general conditions or negotiate the clause during contracting. The same clause is often flowed down to subcontractors, so trades may price it too.
Real Examples
Common Misconceptions
People assume: A no-damage-for-delay clause means the contractor gets nothing for a delay.
Actually: The contractor normally still receives a time extension, which protects it from liquidated damages. What it gives up is the right to be paid for the delay's cost.
People assume: These clauses are always enforced as written.
Actually: Many jurisdictions recognize exceptions such as bad faith, active interference, uncontemplated delays, and abandonment, and some states restrict them on public projects by statute.
Frequently Asked Questions
Are no-damage-for-delay clauses enforceable?
Often yes, but it depends on the jurisdiction and the facts. Many courts recognize exceptions for bad faith, active interference, uncontemplated delays, and abandonment, and some states limit these clauses on public work.
What is the difference between excusable and compensable delay?
An excusable delay entitles the contractor to more time. A compensable delay entitles it to both time and money. A no-damage-for-delay clause turns delays that might otherwise be compensable into excusable-only delays.
How does a no-damage-for-delay clause affect liquidated damages?
Because the contractor still gets a time extension, the completion date moves and liquidated damages generally do not apply for the excused period. The contractor simply cannot recover its own delay costs.
How should a GC handle this clause during preconstruction?
Identify it in the contract review, assess the likelihood of owner-caused delays, and either carry contingency for extended general conditions, qualify the bid, or negotiate a narrower clause.
Is this clause flowed down to subcontractors?
Frequently. GCs often include the same limitation in subcontracts so that subs bear delay costs on the same terms, which means subcontractors should price the risk too.