An essential part of any construction business is a contract. You need a contract for every job to ensure that you protect your business, look out for subcontractors and provide good service to your clients. A contract can help you to manage a project and ensure that you and the client or subcontractor agree about the details. It also provides you with a reference in the event of any issues. There are many clauses and other details that you can add to your contract. One such option is a no damage for delay clause.
According to the Association of the Wall and Ceiling Industry, a no damage for delay clause allows a party to collect damages due to a delay in a project. It is essentially a waiver of the rights of anyone who signs the contract to late sue for damages that come from the delay of the project.
For example, if the client causes a delay that sets you back and costs you money because it delays other projects, a no damage for delay clause prevents you from seeking money to pay for your losses. It also could be damaging to subcontractors in the same way. It also strips clients of rights when you have a project delay that you should have prevented. It is unclear when you create the contract who could fall victim to such a clause.
It is important to note that such clauses may not stand up in court since they are not typically fair. In fact, the no damage for delay clause is not legal in a government contract.
