An Orange County commercial litigation attorney can explain to you that a “no damages for delay” clause is now a standard clause in most construction contracts. Generally, the clause provides that the owner of the property or a contractor will not be liable for the damages associated with any delays with the project. However, the no damages for delay clause does not eliminate all potential liability. Instead, there are some common exceptions to the clause that allow an injured party to collect damages:
- Fraud. If the party responsible for the delay engages in intentional misconduct such as engaging in fraud or misrepresenting the nature of the project, the no damages for delay clause may be unenforceable.
- Interference. In some cases, the party responsible for the delay will intentionally cause the delay. For example, any willful act by the owner or contractor that causes delays such as changing materials or plans at the last minute may null the no damages for delay clause. However, you should know that simples mistakes and minor errors may not rise to the level of interference.
- Long Delays. An extremely long delay may be reason enough for a court to overlook a no damages for delay clause. For example, if a delay is unreasonably long causing extensive damage to a party, a court may award that party damages. Determining whether a delay is unreasonably long is a very fact-specific determination and courts will consider a variety of factors like the nature of the project, length of delay, and the harm suffered.
- Parties Did Not Contemplate the Delay. Parties may anticipate certain types of potential delays in a project and specifically include those in a no damages for delay clause. In these causes, delays that fall outside of what was contemplated may be cause for liability.
Contact an Orange County Commercial Litigation Attorney
Exceptions to the no damages for delay clause are very fact-specific. For specific questions about your case, contact an Orange County commercial litigation lawyer at Daily Aljian LLP by calling 949-861-2524.