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Court Awards Damages Despite “No Damage for Delay” Clause

 

The Massachusetts Appeals Court recently upheld a trial court’s award of damages to a subcontractor in spite of a “no damages for delay clause” in the subcontract.

On a public construction project, the subcontractor entered into a subcontract that contained a clause making extensions of time the exclusive remedy for delays to the subcontractor. The project coordination did not go according to the original schedule, and the subcontractor was not able to start on various phases at the expected times. Despite this, the general contractor did not grant the subcontractor any time extensions. Instead, it insisted that the subcontractor increase the onsite labor, along with other accommodations.

The subcontractor filed suit, seeking payment for additional labor costs incurred due to the site not being ready for that trade’s work and related inefficiencies. The court awarded such damages, finding the failure to grant warranted time extensions to be a “deprivation of remedy.” In other words, the general contractor could not use the defense of the “no damage for delay” clause if it itself did not abide by the terms of the clause.

You can read the full decision here:  Central Ceilings, Inc. v. Suffolk Construction Company, Inc. *This decision may still be subject to further appeal.