Most commercial construction contracts contain a “No Damage For Delay” Clause and most contractors mistakenly believe they are Kings X for any potential claims related to delay caused by an owner or original contractor. While nearly every commercial construction contract contains the same or similar provisions, it is important to keep in mind they all have different authors, which means typically no two clauses are ever drafted the same.
This is particularly important when it comes to “No Damage For Delay” Clauses as the actual breadth of the language and scope will set the tone for their enforcement or circumvention. Their are several common law exceptions to “No Damage for Delay” clauses recognized in Texas, which may be neutralized or ignored by the particular language of a “No Damage for Delay” Clause.
Per the recent case Zachry Constr. Corp. v. Port of Houston Authority of Harris County, 449 S.W.3d 98 (Tex. 2014) the Texas Supreme Court recognizes the following 5 common law exceptions:
(1) the damage producing delay was not intended or contemplated by the parties to be within the purview of the provision;
(2) the damage producing delay resulted from fraud, misrepresentation, or other bad faith on the part of one seeking the benefit of the provision;
(3) the...
