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Contracts & Legal

No Damage for Delay Clause

In Plain English

A clause that says the contractor can only get more time for owner-caused delays but cannot get more money.

Definition

A no-damage-for-delay clause is a contract provision that limits a contractor's remedy for owner-caused delays to a time extension only, precluding recovery of additional compensation. These clauses are disfavored but enforceable in many jurisdictions. Courts have recognized exceptions where delays are caused by owner bad faith, active interference, or are of an unforeseeable nature.

Why It Matters in Bidding

A no-damage-for-delay clause shifts owner-caused delay risk onto the contractor, capping the remedy at a time extension even when an extended schedule burns real money in general conditions, escalation, and idle crews. Estimators and bid reviewers must flag the clause during the go/no-go and either price contingency for unrecoverable delay or pursue qualifications and exceptions before signing.

Example

Reviewing the front-end documents on a public renovation, the GC's chief estimator spots a no-damage-for-delay clause and adds a delay contingency to the markup while the project executive negotiates an exception for owner-directed suspensions exceeding a set number of days.

Related Terms

Delay ClaimDelay DamagesExculpatory ClauseForce Majeure

Frequently Asked Questions

In many U.S. jurisdictions these clauses are enforceable, though courts disfavor them and read them narrowly. Several states limit or bar them by statute, especially on public work. Because enforceability and exceptions vary widely, contractors should have counsel review the clause against the governing state law before relying on or accepting it.
Courts commonly recognize exceptions for owner bad faith, active interference, abandonment of the contract, fraud, or delays so unreasonable they were not contemplated by the parties. Proving these is fact-intensive and requires strong documentation, so contractors should preserve daily records, correspondence, and timely notice throughout the delay period.
Treat it as a risk-allocation flag during go/no-go review. Options include adding delay contingency to general conditions, taking a written exception in the bid, negotiating a carve-out for owner-directed suspensions, or declining the job. Pricing the clause as if delays cost nothing is the mistake that erodes margin after award.

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