What is a no-damage-for-delay clause, and when is it enforceable?
A no-damage-for-delay clause says a delayed contractor gets more time but no money. Courts generally enforce clear clauses, with exceptions for delays the parties did not contemplate, bad faith or active interference, and delays long enough to amount to abandonment. In Texas, the Zachry decision (2014) bars using one to excuse an owner's deliberate, wrongful conduct.
This guide is general information, not legal advice. Statutes and cases are cited as checked on 2026-10-21; have counsel confirm how they apply to your contract and state.
What does a no-damage-for-delay clause do?
It moves the cost of delay to the contractor. A typical clause reads: "Contractor's sole remedy for any delay, hindrance or interference, whatever the cause, shall be an extension of the Contract Time." The time extension protects you from liquidated damages, but the costs of being on site longer stay with you:
- Extended general conditions: supervision, trailers, temporary utilities.
- Idle or underused equipment and crews.
- Labor and material escalation on work pushed into a later period.
- Home office overhead absorbed by a longer job.
What exceptions do courts recognize?
Courts read these clauses strictly and have carved out exceptions. The Texas Supreme Court listed the ones Texas courts of appeals apply, and New York's highest court set out a similar list.
| Exception | What it covers | Where recognized |
|---|---|---|
| Not contemplated | Delay of a kind the parties did not have in mind when they signed | Texas (listed in Green v. Solis, 1997); New York (Corinno Civetta, 1986) |
| Bad faith or fraud | Fraud, misrepresentation or bad faith by the party relying on the clause; in New York also willful, malicious or grossly negligent conduct | Texas; New York |
| Abandonment | Delay so long the contractor would be justified in abandoning the contract | Texas; New York |
| Outside the clause | Delay not among the specific delays the clause lists | Texas |
| Active interference | Arbitrary and capricious acts or other wrongful interference with the work | Texas (Zachry, 2014) |
| Fundamental breach | Delay from the owner's breach of a fundamental obligation of the contract | New York |
Some states go further by statute, especially on public work. The Zachry court counted five state legislatures that had limited these clauses, so check the law of the project state.
Are no-damage-for-delay clauses enforceable in Texas?
Generally yes, with a hard limit. In Green International, Inc. v. Solis, 951 S.W.2d 384 (Tex. 1997), the Texas Supreme Court held that a contractor may agree to assume the risk of delay. In Zachry Construction Corp. v. Port of Houston Authority (No. 12-0772, decided August 29, 2014), it held that the clause did not bar Zachry's delay claim, because a party cannot contract away liability for its own deliberate, wrongful conduct. The court joined decisions from at least 28 American jurisdictions.
How does it interact with AIA A201 Sections 8.3 and 15.1.7?
AIA A201-2017 has no no-damage-for-delay clause. When one appears, it was added by the owner or GC, and it collides with three sections:
- 8.3.1 extends the Contract Time for owner acts, changes, weather and other causes beyond the contractor's control.
- 8.3.3 says Section 8.3 "does not preclude recovery of damages for delay by either party under other provisions of the Contract Documents". A no-damage-for-delay clause removes that recovery.
- 15.1.7, the mutual waiver of consequential damages (numbered differently in older editions), already waives the contractor's principal office expenses, financing losses and lost profit other than profit arising directly from the Work. Home office overhead is waived even without a no-damage-for-delay clause; field costs such as extended general conditions are not.
ConsensusDocs 200 goes the other way: 6.3.2 gives the constructor a price adjustment for owner-caused delay, subject to the 6.6 waiver. A no-damage-for-delay clause in supplementary conditions to either form is a major deviation from the base text.
What should you negotiate?
- Strike the clause, or limit it to delays outside both parties' control, such as weather.
- Carve out owner-caused and GC-caused delay, changes in sequence, late information and site access.
- Cap the number of uncompensated delay days, with field costs paid after that.
- For subs: a pass-through of any delay recovery the GC obtains from the owner for your work.
Dora, BAU AI's contract review agent, flags no-damage-for-delay language wherever it sits, including supplementary conditions and subcontract riders, and cites it against A201 8.3 and 15.1.7 so counsel can decide the position.
No-damage-for-delay review checklist
- Does any clause make a time extension the "sole" or "exclusive" remedy for delay?
- Does it cover delays caused by the owner or GC, or only third-party causes?
- Has A201 8.3.3 been deleted or overridden?
- Is the 15.1.7 consequential damages waiver still mutual, and what does it already waive?
- Are notice periods for delay claims workable, and who tracks them?
- Does the subcontract pass the clause down while the GC keeps its own delay rights against the owner?
- Which state's law applies, and does it limit these clauses by statute or case law?
Frequently asked questions
What is a no-damage-for-delay clause?
A contract term that limits a delayed contractor to an extension of time, with no money for the delay. It is common in owner-drafted contracts and GC subcontract forms, and does not appear in the AIA A201-2017 base text.
Does a no-damage-for-delay clause stop liquidated damages?
No. The time extension it gives keeps liquidated damages from running for excused days, but it does not pay your delay costs. You still need a timely time extension claim under the contract.
Is home office overhead recoverable under AIA A201?
Generally not. AIA A201-2017 15.1.7 waives the contractor's principal office expenses as consequential damages. Field costs of delay remain recoverable unless another clause bars them.
Are no-damage-for-delay clauses enforceable on Texas public projects?
They can be, but Zachry Construction Corp. v. Port of Houston Authority (Tex. 2014) held that such a clause does not shield an owner, including a local governmental entity, from liability for its own deliberate, wrongful conduct.