No-Damages-for-Delay Clauses: When They Hold and When They Don't
A no-damages-for-delay (NDFD) clause — sometimes called a "no-damages" or "time-only" clause — is the owner's contract provision saying that if the contractor encounters delays on the project, the remedy is a time extension, not money. The contractor absorbs the extended general conditions, the idle equipment, the home office overhead, the acceleration costs, and whatever other financial impact the delay caused. All they get in exchange is additional time to complete.
These clauses are common on large private commercial projects, public-work contracts in states that allow them, and design-build contracts where the owner is trying to push delay risk down to the contractor. They shift enormous risk to the contractor because delays on construction projects routinely have five- and six-figure cost impacts per week of delay. A contractor bidding an NDFD project has to price that risk in or accept that some portion of delay cost will come out of their margin.
NDFD clauses shift risk, simplify owner-side budgeting, and reduce the litigation surface. When delays inevitably happen, the owner doesn't have to negotiate or litigate extended general conditions, home office overhead, or acceleration cost; they grant time extensions and the commercial discussion is over. For owners doing many projects, the administrative savings and predictability of NDFD clauses are real benefits.
Contractors bidding NDFD projects have two choices: price in the expected delay cost as a risk premium (raising their bid), or accept the risk and hope no major delays happen. The first option is the disciplined answer; the second is how contractors lose money on NDFD projects.
NDFD clauses are generally enforceable in most US jurisdictions, but a handful of states have statutes that limit or void them, particularly on public work. Examples:
State-by-state NDFD variations
- California — Public Contract Code §7102 prohibits NDFD clauses on public projects for owner-caused delays
- New York — NDFD clauses are enforced on private work but common-law exceptions (discussed below) are broadly applied; public-work statutes add limits
- Washington — Statute limits NDFD enforcement on public projects
- Colorado — Statutory limits on NDFD clauses in public work
- Oregon — Public-work limits
- Virginia — Common-law exceptions apply broadly; public-work limits exist
- Texas, Florida, Georgia, and most other states — NDFD clauses are generally enforced subject to common-law exceptions
The variation means multi-state contractors can't apply a single mental model. An NDFD clause in a California public project is unenforceable for owner-caused delay; the same clause in a Texas private project is probably enforceable. Legal review of the specific contract against the specific jurisdiction is the discipline.
Even where NDFD clauses are generally enforced, courts have developed several common-law exceptions that allow contractors to recover delay damages despite the clause. The specific exceptions vary by state, but a typical list:
Common-law exceptions to NDFD clauses
- Delays caused by the owner's bad faith, fraud, or willful misconduct — the clause doesn't shield an owner who actively harmed the contractor
- Active interference by the owner — the owner actively prevented or interfered with the contractor's performance beyond what was contemplated in the contract
- Delays of a kind not contemplated by the parties when they contracted — if the delay arose from an entirely unforeseen cause outside the contract's contemplation, the clause may not apply
- Delays so unreasonable as to amount to abandonment or fundamental breach
- Failure of the owner to disclose superior knowledge — similar to the constructive-change doctrine, withholding material information can defeat the clause
- Gross negligence in contract administration — some states allow recovery for gross negligence even under an NDFD clause
These exceptions are fact-specific. "Bad faith" and "active interference" aren't defined crisply in most jurisdictions; courts evaluate them case by case. A contractor seeking to invoke an exception needs evidence of the specific conduct that pushes the delay out of the clause's protection.
On a project with an NDFD clause, documentation of owner conduct becomes even more important than usual. If delays arise and you believe the owner's actions go beyond ordinary administration, contemporaneous records of specific conduct are what make the exception viable.
NDFD clauses typically block recovery of:
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Costs typically barred by NDFD clauses
- Extended general conditions (site office, temporary utilities, supervision on site) during the delay period
- Home office overhead attributable to the extended project duration (Eichleay-type recovery)
- Idle equipment costs during the delay
- Acceleration costs required to recover schedule after the delay
- Extended bond and insurance premiums for the additional time
- Labor inefficiency and productivity loss caused by the delay
What contractors can still recover, even under NDFD clauses, is typically limited to direct cost increases caused by the owner's changes in scope, differing site conditions claims that the contract recognizes separately, and any items specifically excepted from the NDFD clause in the contract language. Time extensions, of course, remain available.
NDFD clauses are sometimes negotiable, especially on private projects where the contractor has leverage. Common negotiated modifications:
Ways to soften an NDFD clause in negotiation
- Exceptions carved into the clause itself for specific owner-caused delays (owner changes, owner-caused design delays, late owner decisions)
- A cap on the NDFD clause's application (NDFD applies for the first X days of delay, beyond which extended costs are recoverable)
- Time-and-materials compensation for contractor-initiated acceleration even when NDFD otherwise applies
- Mutual NDFD — the contractor also doesn't owe the owner delay damages if the contractor causes delay, only time extensions (owner preserves other remedies like liquidated damages)
On public work where NDFD is enforced, these negotiations may not be available — the clause is often in the boilerplate and not subject to modification. On private work, contractors should at minimum attempt to narrow the clause's scope or carve out specific owner-caused delay categories.
A contractor bidding an NDFD project should add a contingency for the expected delay cost they can't recover. The size of the contingency depends on the project's delay risk profile: a straightforward new construction in a predictable environment might only warrant a 1-2% contingency; a renovation with unknown site conditions might need 5-7%.
Pricing this in is uncomfortable because it raises the bid price. Contractors who don't price it in and then lose money on delays are compensating for the absent contingency with their own margin. The market-level reality is that contractors on NDFD projects either price the risk appropriately or lose it on the back end.
No-damages-for-delay clauses allocate the financial cost of delays to the contractor, leaving only time extensions as the remedy. They're enforceable in most US jurisdictions with state-by-state variations, and subject to common-law exceptions for bad faith, active interference, and similar owner conduct. Contractors bidding NDFD projects should price the delay risk into their bid, negotiate carve-outs where possible, and document owner conduct meticulously so the exceptions remain accessible if significant delays arise. Treating an NDFD clause as boilerplate that won't matter is how contractors get burned by it.
Written by
Jordan Patel
Compliance & Legal
Former corporate counsel specializing in construction contracts and tax compliance. Writes about the documentation layer — COIs, W-8/W-9, certified payroll, notice-to-owner deadlines — and the legal backbone behind audit-ready AP.
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