15.8 No Damages for Delay Clauses

LibraryVirginia Construction Law Deskbook (Virginia CLE) (2019 Ed.)

15.8 NO DAMAGES FOR DELAY CLAUSES

15.801 In General. No damages for delay contract clauses seek to prohibit a party to the contract from recovering damages resulting from delays to its performance that are not the fault of that party.

A typical "No Damages for Delay" clause reads as follows:

Should the Contractor be delayed in the commencement, prosecution or completion of the Work by the act, omission, neglect or default of the Owner, Construction Manager, or of anyone employed by them, or of any other Contractor or Subcontractor on the Project, or by other cause beyond the contractor's control, and without any fault, neglect, act or omissions on its part, then the Contractor shall not be entitled to additional compensation, but shall be entitled to an extension of time only, such an extension to be for a period equivalent to the time lost by reason of any and all of the aforesaid causes, as determined by the Construction Manager. The Contractor shall not be entitled to any such extension of time, however, unless a claim therefor is presented in writing to the Construction Manager within twenty-four (24) hours of the commencement of such claimed delay. Such extension of time, as determined by the Construction Manager shall release and discharge the Owner and Construction Manager from any and all claims of whatever character by the Contractor on account of said delay(s).

15.802 Virginia Public Construction Contracts. For years, the Virginia Code has prohibited terms in public construction contracts that bar damages for unreasonable delay. 275 The statute reads:

[Page 693]

§ 2.2-4335. Public construction contract provisions barring damages for unreasonable delays declared void.

A. Any provision contained in any public construction contract that purports to waive, release, or extinguish the rights of a contractor to recover costs or damages for unreasonable delay in performing such contract, either on his behalf or on behalf of his subcontractor if and to the extent the delay is caused by acts or omissions of the public body, its agents or employees and due to causes within their control shall be void and unenforceable as against public policy.

B. Subsection A shall not be construed to render void any provision of a public construction contract that:

1. Allows a public body to recover that portion of delay costs caused by the acts or omissions of the contractor, or its subcontractors, agents or employees;

2. Requires notice of any delay by the party claiming the delay;

3. Provides for liquidated damages for delay; or

4. Provides for arbitration or any other procedure designed to settle contract disputes.

C. A contractor making a claim against a public body for costs or damages due to the alleged delaying of the contractor in the performance of its work under any public construction contract shall be liable to the public body and shall pay it for a percentage of all costs incurred by the public body in investigating, analyzing, negotiating, litigating and arbitrating the claim, which percentage shall be equal to the percentage of the contractor's total delay claim that is determined through litigation or arbitration to be false or to have no basis in law or in fact.

D. A public body denying a contractor's claim for costs or damages due to the alleged delaying of the contractor in the performance of work under any public construction contract shall be liable to and shall pay such contractor a percentage

[Page 694]

of all costs incurred by the contractor to investigate, analyze, negotiate, litigate and arbitrate the claim. The percentage paid by the public body shall be equal to the percentage of the contractor's total delay claim for which the public body's denial is determined through litigation or arbitration to have been made in bad faith.

The statutory preclusion of clauses barring recovery for "unreasonable delays" led certain counties, cities, and other public bodies to include clauses in their construction contracts defining the circumstances of "unreasonable delays" that would give rise to a contractor's recovery of delay damages. All other delays, even if the fault of the public owner, would be remedied solely with a non-compensable time extension. One such clause was the subject of the Virginia Supreme Court's ruling in Blake Construction Co./Poole & Kent v. Upper Occoquan Sewage Authority. 276 In that case, the court considered the compatibility of the statutory prohibition and the following...

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