Exceptions to “No-Damage-for-Delay” Clause in Construction Contract Explained

The defendant library was sued by the plaintiff contractor which claimed the library caused a delay in the performance of a contract by failing to secure access to an adjacent property which was necessary before plaintiff could complete the work.   In affirming the denial of summary judgment to the defendant library, the Second Department listed the exceptions to the enforceability of a “no-damage-for-delay” clause:

“A clause which exculpates a contractee from liability to a contractor for damages resulting from delays in the performance of the latter’s work is valid and enforceable and is not contrary to public policy if the clause and the contract of which it is a part satisfy the requirements for the validity of contracts generally”…. However, “even with such a clause, damages may be recovered for: (1) delays caused by the contractee’s bad faith or its willful, malicious, or grossly negligent conduct, (2) uncontemplated delays, (3) delays so unreasonable that they constitute an intentional abandonment of the contract by the contractee, and (4) delays resulting from the contractee’s breach of a fundamental obligation of the contract”….  Aurora Contrs Inc v West Babylon Pub Lib, 2013 NY Slip Op 04762, 2nd Dept 6-26-13