‘No Damage for Delays’ Provisions in Construction Contracts: Recent Pennsylvania Case Law

By: Benjamin D. Kerr, Esquire bdk@muslaw.com

In a recent case, Guy M. Cooper, Inc. v. East Penn School District, the Pennsylvania Commonwealth Court ruled that the trial court properly refused to set aside a “no damage for delay” clause when an owner does not guarantee or indemnify against loss occasioned by the delays of independent contractors which may be reasonably anticipated.

In Cooper, the school district awarded a general contractor the overall construction contract and a mechanical contractor the heating, ventilation and air-conditioning contract. Completion of the project was to occur within 460 days of the issuance of the notice to proceed; however, delays developed and substantial completion was delayed by 505 days beyond the original completion date.

The mechanical contractor’s complaint alleged that the school district breached its contract with the mechanical contractor by failing to see that construction proceeded without delay, and specifically that the school district failed to prevent delays by the general contractor.

The “no damage for delay” clause in the contract stated:

“[The School District] shall not be liable to contractor or any subcontractor for claims of damages of a monetary or any other nature caused by or arising out of delays contemplated or not contemplated at the signing of the contract. The sole remedy against [the School District] for delays shall be the allowance to claimant of additional time for completion of work.”

Though “no damage for delay” clauses are generally enforceable in Pennsylvania, prior cases have held that they may be unenforceable where there is a positive or affirmative interference by the owner with the contractor’s work or the owner fails to act on some essential matter necessary to the performance of the work. Similarly, an owner cannot insulate itself from a delay damage claim where it fails to perform an essential contractual duty.

Analyzing the contract language which imposed the duty of coordination and construction scheduling on the general contractor, the Commonwealth Court found no duty in the school district to oversee the construction schedule and held that reasonably anticipated delays by general contractors are covered by the “no damage for delay” clause.

For more information about this case or “no damage for delay” clauses, contact Benjamin D. Kerr at 412-456-2589 or bdk@muslaw.com