“No Damage for Delay” Clauses Do Not Apply to Parties Other Than the Owner

Unless explicitly included in the contract, these clauses do not protect design professionals.

One common point of controversy in construction revolves around project delays.

Delays cost someone, usually all the parties, money. Finger pointing begins. This, more often than not, results in litigation to determine who will absorb the costs resulting from the delays.

The party with the strongest negotiating position, usually the owner, often inserts a clause in the construction project that states there will be no damages for delays caused by that party. These clauses are enforceable.

This was the case in the contract at the center of Perez-Gurri v. McLeod, 238 So. 3d 347 (Fl. Ct. App. 2018), summarized in an article by Matthew DeVries in BEST PRACTICES CONSTRUCTION LAW.

The City of Miami, Florida, hired McLeod, a general contractor, to oversee the construction of renovations in the Little Haiti area of the city.

“When the construction project was delayed, the general contractor filed suit against numerous designers, architects, engineers and subconsultants.”

“The architect filed a motion for summary judgment, arguing that the general contractor’s delay claim was contractually barred by a ‘No Damages for Delay’ clause in the contract between the general contractor and the City of Miami.”

The architect prevailed in trial court. Upon appeal, the appellate court reversed the lower court’s decision. The question addressed by the court was whether the No Damages for Delay clause protected the architect as well as the owner?

The No Damages for Delay clause in the contract stipulated that— “’No claim for damages or any claim, other than an extension of time, shall be made or asserted against City by reason of any delays except as provided herein. Contractor shall not be entitled to an increase in the Contract price or payment or compensation of any kind from …’” The contract language included the underlined language in bold shown above.

The court determined that “’If M2G2 Architects were intended to be protected by the no delay damaged provision, one would expect some reference to that idea in this provision which otherwise precludes any third party beneficiaries to the contract.’”

Mr. DeVries final admonition to parties to construction contracts is age-old but worth repeating— “words have meaning.”

Source—

Slow as a Turtle/ “No Damages For Delay” Clause Inapplicable to Contractor’s Claim Against Architect, Matthew DeVries, BEST PRACTICES CONSTRUCTION LAW, September 5, 2018.