Podcast: Subcontractor Delay Claims May Succeed Despite No-Damage-for-Delay Clause

Contracts often prohibit construction subcontractors from collecting damages for project delays caused by others, but a new audio podcast from the American Subcontractors Association explains that “no-damage-for-delay” contract provisions don’t always prevent subcontractors from successfully pursuing delay claims.

“A no-damage-for-delay clause is simply an agreement where [the subcontractor] promise[s] not to sue the general contractor if there are delays on the job that the general contractor, and sometimes the owner, cause that cost [the subcontractor] unanticipated expenses on the job,” explains podcast presenter Richard Thomas, a construction attorney with Thomas, Feldman & Wilshusen, Dallas, Texas. Thomas explains that there are common exceptions to the enforceability of no-damage-for-delay clauses, meaning that, in certain jurisdictions and certain scenarios, subcontractors may successfully pursue delay claims even if a contract contains a no-damage-for-delay clause. The podcast is available on the ASA Web site, www.asaonline.com.

Thomas cites scenarios in which a delay claim might succeed, including when a general contractor fraudulently misrepresents the project schedule, or itself actively causes a delay. Other scenarios include unreasonable delays and delays not anticipated by any party when the contract is signed.

Thomas warns that the probability of success of a subcontractor’s delay claim depends on several factors, including the details of the claim and the jurisdiction in which it will be decided. “The outcome depends on the specific facts of each case,” he says. “As a matter of fact, two juries could hear the exact same set of facts and arrive at different conclusions on whether one of these exceptions apply.” Subcontractors interested in pursuing delay claims based on exceptions to no-damage-for-delay clauses should consult a qualified construction attorney, he says.