Construction Law

No-Damages-For-Delay Clause May Be Unenforceable

By Ryan McCabe

        
        Williams & Sons Erectors, Inc. v. South Carolina Steel Corp., 983 F.2d 1176 (2d Cir. 1993).

            The parties to a contract may choose how to share liability. For example, the contract can address what amounts each party would owe or have to pay, when such amounts would be due, and who would be liable for additional costs. Similarly, the parties may agree how to deal with damages resulting from construction delays.

            In the Williams & Sons Erectors case, the contract provided the following no-damages-for-delay clause: "No claims for increased costs, charges, expenses or damages of any kind shall be made by the Contractor against the Owner for any delays or hindrances from any cause whatsoever; provided that the Owner, in the Owner's discretion, may compensate the Contractor for any said delays by extending the time for completion of the Work as specified in the Contract."

            The court nevertheless found the provision unenforceable. The reasoning behind the court's holding was that other language in the contract contradicted the no-damages-for-delay clause, which made the agreement as a whole ambiguous. For example, the contract included a clause imposing delay impact costs arising from charge orders. Because it concluded that the contract was ambiguous, the court allowed both parties to present extrinsic evidence in support of their assertions. 

            In conclusion, no-damages-for-delay clauses appear enforceable if clearly written and consistent with the rest of the contract.  

            This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.

Full post as published by The South Carolina Construction Law Blog on April 13, 2009 (boomark / email).