PROTECTING ENGINEER AGAINST CONSTRUCTION

DELAY CLAIMS: NDC

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By David M. Leishman1

ABSTRACT: The "no damage for delay clause" (NDC), often used by owners to
protect against construction delay claims, can also be used to protect the engineer.
Although such clauses are not a panacea, a well-drafted NDC, along with respon-
sible action on the part of the engineer, will constitute a formidable defense to the
delay claims (real or fancied) asserted against the engineer by construction con-
tractors.

INTRODUCTION

As construction costs escalate and as construction contractors become in-

creasingly litigious, sophisticated owners have sought methods of controlling
unanticipated costs and defeating contractor claims. One of the most widely
used of these methods is the inclusion of a "no damage for delay clause"
(NDC) in the construction contract.

In its most common form, a NDC is used to insulate an owner from dam-
ages claimed by a contractor as a result of delays in the progress of the
construction work. A typical NDC provides:

The contractor agrees to make no claim for damages for delay in the
performance of the contract occasioned by any act or omission to act
on the part of City or any of its representatives, and agrees that any
such claim shall be fully compensated for by an extension of time to
complete performance of the work as provided herein [see: When Own-
ers Should Pay For Construction Delay: Corrino Civetta Construction
Corp. and the No-Damage-For-Delay-Clause, 9 Cardozo L. Rev. 879,
880 n.10 (1982) (quoting agreement—The City of New York Envi-
ronmental Protection Administration, Department of Water Resources,
1970, art. 13, at 17 [emphasis omitted])].

Absent a NDC, the contractor can normally recover its delay damages
from the owner, including both financial costs and time lost because of the
delay [see, e.g., C. Dunham, R. Young & J. Bockrath, Contracts, Speci-
fications, and Law For Engineers at 203 (1979); City of Houston v. R. F.
Ball Construction Co., Inc., 570 S.W.2d 75 (Tex.Civ.App. 1978); and Ken-
worthy v. State, 236 Cal.App.2d 378, 46 Cal.Rptr. 396 (1965)].
'Civ. Engr., Attorney, Office of Corporate Counsel, James M. Montgomery, Con-
sulting Engrs., Inc., 250 N. Madison Ave., Pasadena, CA 91101.
Note. Discussion open until December 1, 1991. To extend the closing date one
month, a written request must be filed with the ASCE Manager of Journals. The
manuscript for this paper was submitted for review and possible publication on Au-
gust 2, 1990. This paper is part of the Journal of Management in Engineering,
Vol. 7, No. 3, July, 1991. ©ASCE, ISSN 0742-597X/91/0003-0314/$1.00 + $.15
per page. Paper No. 26008.

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J. Manage. Eng. 1991.7:314-333.

 But the owner is not the only party that may be responsible for delay
damages. In certain situations, the engineer, subcontractors, materials sup-
pliers, construction manager, and other prime contractors may be liable. The
term engineer, as used herein, refers to any design professional working
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under a separate prime contract with the owner. It does not include design
professionals who are employees or agents of the owner. This is because
design professionals who are the owner's agents or employees are usually
protected by principles of the agency doctrine or the doctrine of respondeat
superior.

Delay claims against the engineer may be particularly onerous. Where an

engineer, for example, issues imperfect plans and specifications, performs
slow shop-drawing reviews, makes untimely design changes, or makes slow
revisions to construction drawings, it may be liable for such contractor delay
damages as increased field and office overhead, costs of idle equipment,
increased bond and insurance costs, and lost contractor profits. The costs
merely to defend such claims, whether legitimate or not, may easily exceed
the engineer's entire fee.

With an appropriately drafted NDC, however, many of these contractor

delay claims may be defeated. For example, in Bates & Rogers Construction
Corporation v. Greeley & Hansen [109 El.2d 225, 486 N.E.2d 902 (1985)]
the contractor and various subcontractors on a sewage treatment plant project
sued the owner's engineer, alleging that the engineer

was negligent in designing electrical switch gear for the project, in

failing to timely cure the design defects, in requiring a redesign of the
switchgear after it had been ordered from the supplier, in failing to
provide electrical service to the jobsite, and, more generally, in ex-
ercising its powers as engineer for the project. [Id., 486 N.E.2d at
904.]

The engineer's primary defense was that the damages sought were delay
damages and that the contractor was precluded from recovering those dam-
ages since a NDC was included in the construction contract. The court agreed
and dismissed the claim against the engineer. Without the NDC to protect
it, the engineer may have had no effective defense.

While all lawsuits may not end so happily for the engineer, this case does
illustrate that a properly drafted NDC may protect the engineer against the
delay claims of the contractor. This is not to say, however, that all NDCs
will protect the engineer against all claims, or even against all delay claims.
Since NDCs may result in harsh consequences to the contractor, courts have
strictly constructed them and limited their application in certain situations.

ENFORCEABILITY OF N D C S

A number of commentators have decried the use of NDCs, claiming var-

iously that they are void as against public policy, are unconscionable, are
contracts of adhesion, and even, imaginatively, are improperly low estimates
315

J. Manage. Eng. 1991.7:314-333.

 of liquidated damages [see, e.g., C. Dunham, R. Young & J. Bockrath,
Contracts, Specifications, and Law for Engineers at 203 (1979); Cox, Re-
covery of Delay Damages in Construction Contracting: The No Damages
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for Delay Clause, Virginia B.A.J., Spring 1981 at 19; 'Wo Damage" Clauses
in Construction Contracts: A Critique, 53 Wash.L.Rev. 471 (1978); The
Enforceability of "No Damage for Delay" Clauses in Construction Con-
tracts, 28 Loy.L.Rev. 129 (1982)]. Despite these attacks, most courts have
uniformly upheld and enforced NDCs except in certain, usually egregious,
circumstances. Most courts hold that NDCs are the result of a voluntary
agreement negotiated by competent parties, even when a project has been
competitively bid (see, e.g., Wells Brothers Company of New York v. United
States, 254 U.S. 83, 415 S.Ct. 34, 65 L.Ed. 148 (1920)]. NDCs, however,
are not always enforced (for a complete exposition on the enforceability of
NDCs see Annot., 74 A.L.R.3d 187.)

Although the law of NDCs varies from jurisdiction to jurisdiction, some

common-law rules of general applicability have evolved over the years. The
major common-law exceptions to the enforceability of NDCs are where: (1)
The delay was not contemplated when the parties entered into the contract;
(2) the party causing the delay acted in bad faith against the contractor; (3)
the duration of the delay was unreasonable; and (4) the party causing the
delay actively interfered with the progress of the contractor's work.

In addition to the common-law exceptions, at least four states have enacted

statutes that limit the enforceability of NDCs in certain situations (see fol-
lowing: Common Law Exceptions; subheadings—Uncontemplated Delays,
Bad Faith, and Unreasonably Lengthy Delays). Furthermore, arbitrators, who
are not always bound to follow the law, may refuse to enforce a NDC (see
following: Common Law Exceptions; subheading—Active Interference).

Common-Law Exceptions

Uncontemplated Delays
Since NDCs may operate harshly upon a contractor, such clauses are usu-
ally strictly construed by the courts. This means courts will enforce NDCs
only to the extent of their express language. If it is clear from the NDC that
a particular delay was not contemplated by the parties when they entered
into the contract, the courts will not invoke the NDC to exculpate the party
causing the delay. This may be a problem where a specific "laundry list"
type of NDC is included in the construction contract and the delay that ac-
tually occurred is not included in the list. The problem may be more severe,
however, where a broader form "any and all delays" NDC is included in
the contract.

With the more broadly worded NDCs, most courts will enforce the clause
if the circumstances causing the delay were actually forseeable. For exam-
ple, in Corrino Civetta Construction Corporation v. City of New York [67
N.Y.2d 297, 493 N.E.2d 905, 502 N.Y.S.2d 681 (1986)], the construction
contractor was delayed in the prosecution of its work on a sewer-line project
when a moratorium on street excavation was announced. Even though the

316

J. Manage. Eng. 1991.7:314-333.

 contractor knew the moratorium would go into effect before it executed the
contract, it still claimed delay damages against the city. The city defended
by invoking the NDC. The court held for the city, stating that the street
excavation moratorium was contemplated and forseeable, and that since no
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other exceptions to the application of the NDC existed, the clause would be
enforced.

A more difficult problem with broadly worded NDCs arises when the cir-
cumstances causing the delay were truly unforseeable. The courts have taken
two diverse approaches in these situations. Some jurisdictions, such as New
York, New Jersey, Idaho, and California, have ruled that broadly worded
NDCs will be given effect only when the circumstances causing the delay
were actually contemplated by the parties when they entered into the con-
tract. Other jurisdictions, such as Texas, Iowa, Washington, and Utah, have
ruled that broadly worded NDCs contemplate both forseeable and unforsee-
able delays.

Bad Faith
The courts have almost universally recognized that a party who acts in
bad faith or who otherwise engages in misrepresentation, fraud, or other
intentional misconduct should not be entitled to rely upon a NDC as a de-
fense. Massachusetts appears to be the only jurisdiction to hold otherwise
[see Wes-Julian Construction Corporation v. Commonwealth, 351 Mass. 588,
223 N.E.2d 72 (1967); and Marsch v. Southern New England R. Corp., 230
Mass. 483, 120 N.E. 120 (1918)]. Of course, whether a party acted in bad
faith is a factually sensitive issue and will be determined by the courts on
a case-by-case basis. Despite this difficulty, a few courts have articulated
guidelines as to what constitutes bad faith.

In Kalisch-Jarcho, Inc. v. City of New York, [58 N.Y.2d 377, 448 N.E.2d
413, 461 N.Y.S.2d 746 (1983)] the court held that the actions of the party
causing the delay must have amounted to gross negligence or willful mis-
conduct in order for the claimant to avoid the application of the NDC. An-
other court has held that the actions of the party causing delay must "tran-
scend mere lethargy or bureaucratic bungling" [Southern Gulf Utilities, Inc.
v. Boca Ciega Sanitary District, 238 So.2d 458, 459 (Fla. Dist. Ct. App.
1970), cert, denied, 240 So.2d 813 (Fla. 1970)] in order to defeat the NDC.

While there is no bright-line test as to what constitutes bad faith and while
proof of bad faith will depend on all the facts and circumstances of a par-
ticular case, it is clear that most courts require a showing of at least some
degree of recklessness or intentional misconduct (as opposed to mere neg-
ligence) for a claimant to defeat the application of a NDC [see, e.g., Kal-
isch-Jarcho, Southern Gulf Utilities, Inc. v. Boca Ciega Sanitary District,
238 So.2d 458, 459 (Fla. Dist. Ct. App. 1970), cert, denied, 240 So.2d
813 (Fla. 1970); Unicon Management Corp. v. City of Chicago, 404 F.2d
627 (7th Cir. 1968)].

Unreasonably Lengthy Delays

The third common-law exception to the enforcement of NDCs is often
characterized as an unreasonable delay amounting to "an abandonment of
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J. Manage. Eng. 1991.7:314-333.

 the contract" [(American Bridge Co., Inc. v. State, 245 A.D. 535, 283 N.Y.S.
577, 584 (1935), citing People ex rel. Wells & Newton Company of New
York v. Craig, 232 N.Y. 125, 133 N.E.419 (1921)]. Again, whether the
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duration of the delay is sufficient to be considered unreasonable will depend

on all the facts of a particular case.
For example, in E. C. Nolan Co., Inc. v. State, [58 Mich.App. 294, 227
N.W.2d 323 (1975)] the construction contractor was delayed 9-1/2 months
in a contract of 24 months duration. The contractor claimed delay damages
and the state defended by invoking the NDC. The court held that the NDC
was not enforceable, as "[a] delay of 9-1/2 months, or almost one-half of
the total time allowed for the complete project, is in our view clearly un-
reasonable and excessive" (58 Mich.App. 227 N.W.2d at 327). On the other
hand, in Western Engineers, Inc. v. State Road Commission [20 Utah 2d
294, 437 P.2d 216 (1968)], when the construction contractor was delayed
3-1/2 years in a contract of 9 months duration, the court upheld the validity
of the NDC.
In considering whether a delay is unreasonably lengthy, courts will often
consider the other exceptions to enforcement as well. If a delay was con-
templated by the parties and no bad faith was involved, courts will often
not refuse to give meaning to the NDC merely because the contemplated
delay was lengthy. Perhaps the clearest rule is that courts will exercise broad
discretion in determining whether a particular delay is of such duration that
it should be considered unreasonable.

Active Interference
To trigger the active interference exception to the general rule of NDC
enforceability, a delay must be more than "a simple mistake, error in judg-
ment, lack of total effort or lack of complete diligence . . . " [Peter Kiewit
Sons' Co. v. Iowa Southern Utilities Co., 355 F.Supp 376, 399 (S.D. Iowa
1973)]. It must be caused by "some affirmative, willful act in bad faith, to
unreasonably interfere with [the contractor's] compliance with the terms of
[the] construction contract" [Peter Kiewit Sons' Co. v. Iowa Southern Util-
ities Co., 355 F.Supp 376, 399 (S.D. Iowa 1973)]. As with the bad-faith
exception, mere negligence is not enough. Some willful, affirmative act that
delays the progress of the work is required to constitute active interference.
For example, issuing a notice to proceed when the owner knew construction
would be delayed has been held to constitute active interference [American
Bridge Company, 58 Mich.App. 294, 227 N.W.2d 323 (1975)]. Similarly,
an owner's false representation to the contractor that the project right-of-way
had been acquired was held to constitute active interference [Nix, Inc. v.
City of Columbus, 111 Ohio.App. 133, 171 N.E.2d 197 (1959)].

Again, there is no mechanical test to determine what actions might con-

stitute active interference. As with other exceptions, the courts' determina-
tion of whether active interference actually occurred depends on all the facts
and circumstances and will be determined on a case-by-case basis.

Statutory Limitations
Apart from the common-law exceptions to the enforcement of NDCs, at
least four states have enacted statutes that, to various degrees, limit their
318

J. Manage. Eng. 1991.7:314-333.

 enforceability (see generally, Walker, Statutory Responses to "No Damage
For Delay Clauses," Construction Lawyer, April 1986 at 9).

The first jurisdiction to do so was the State of Washington. Feeling disen-

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chanted with a recent state supreme court decision, [Nelse Mortensen & Co.
v. Group Health Cooperative of Puget Sound, 17 Wash.App. 703, 566 P.2d
560 (1977), aff'd, 90 Wash.2d 843, 586, P.2d 469 (1978)] the construction
industry lobbied the Washington legislature to enact a statute limiting the
enforceability of NDCs in that jurisdiction (see Walker, Statutory Responses
to "No Damage For Delay Clause," for a brief history.) The statute, as
adopted reads:

Any clause in a construction contract, as defined in RCW 4.24.370,

which purports to waive, release, or extinguish the rights of a con-
tractor, subcontractor, or supplier to damages or an equitable adjust-
ment arising out of unreasonable delay in performance which delay is
caused by the acts or omissions of the contractee or persons acting for
the contractee is against public policy and is void and unenforceable.
This section shall not be construed to void any provision in a con-
struction contract, as defined in RCW 4.24.370, which (1) requires
notice of delays, (2) provides for arbitration or other procedure for
settlement, or (3) provides for reasonable liquidated damages [Wash.
Rev. Code §4.24.360 (1988)].

It is interesting to note that in the Washington statute, NDCs are declared

to be void only if they "arise out of unreasonable delay" [Wash. Rev. Code
§4.24.360 (emphasis added)] and if such "delay is by the acts or omissions
of the contractee or persons acting for the contractee." Although it is not
known how the Washington Supreme Court would interpret this statute, it
seems likely that reasonable delays (i.e., delays of a reasonable nature and
duration), or delays not caused by the contractee or its representatives (e.g.,
acts of God, forces majeures, acts of remote third parties, etc., and perhaps
even delays usually attributable to the owner, such as delays resulting from
differing site conditions or the discovery of toxic or hazardous materials),
do not fall within the purview of this statute.

A short time after the passage of the Washington statute, construction

industry lobbyists pushed the California Assembly to adopt a statute limiting
the effects of NDCs in that state (see Walker, Statutory Responses to "No
Damage for Delay Clauses," Construction Lawyer, April 1986 at 9, for a
brief history). The compromise version of the bill that was passed and later
amended reads:

Contract provisions in construction contracts of public agencies and

subcontracts thereunder which limit the contractee's liability to an ex-
tension of time for delay for which the contractee is responsible and
which delay is unreasonable under the circumstances involved, and not
within the contemplation of the parties, shall not be construed to pre-
clude the recovery of damages by the contractor or subcontractor.
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J. Manage. Eng. 1991.7:314-333.

 No public agency may require the waiver, alteration, or limitation of
the applicability of this section. Any such waiver, alteration, or lim-
itation is void. This section shall not be construed to void any pro-
vision in a construction contract which requires notice of delays, pro-
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vides for arbitration or other procedure for settlement, or provides for

liquidated damages [Cal. Pub. Cont. Code §7102 (West 1990)].

Although the California courts have not yet had the occasion to construe
this statute, it appears to be limited to NDCs in the "construction contracts
of public agencies which delay is unreasonable under the circumstances in-
volved" and which delay was "not within the contemplation of the parties"
[Cal. Pub. Cont. Code §7102 (West 1990) (emphasis added)]. This language
suggests that the California statute is of virtually no effect in limiting the
traditional application of NDCs. This interpretation is further reinforced by
suggestions that "the legislation was intended only to codify existing [com-
mon] law" [Walker, Statutory Responses to "No Damage for Delay Clauses,"
Construction Lawyer, April 1986 at 10, citing Senate Comm. on Judiciary,
1983-1984 Reg. Sess., analysis of A. 1837 by the committee consultant
(1984)].

In 1985, the State of Oregon adopted a slightly refined version of Wash-

ington's anti-NDC statute. The Oregon version reads:

1. Any clause in a public contract for a public improvement that pur-

ports to waive, release or extinguish the rights of a contractor to damages
or an equitable adjustment arising out of unreasonable delay in performing
the contract, if the delay is caused by acts or omissions of the public
contracting agency or persons acting therefor, is against public policy and
is void and unenforceable.
2. Subsection (1) of this section is not intended to render void any con-
tract provision that:
a. Requires notice of any delay;
b. Provides for arbitration or other procedures for settlement of con-
tract disputes; or
c. Provides for reasonable liquidated damages [Or. Rev. Stat. §279.063
(1989)].

As with the Washington statute, the Oregon statute appears not to apply
to reasonable delays or delays not "caused by the acts or omissions of the
public contracting agency or persons acting therefor" [Or. Rev. Stat. §279.063
(1989)]. Furthermore, as in California, the statute appears to apply only to
public works contracts, not to private sector contracts.

The most recent jurisdiction to enact anti-NDC legislation was the State
of Colorado (Public Contract Newsletter, Section of Public Contract Law,
American Bar Association, Winter 1990 at 12). The statute, effective July
1, 1989, reads:

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J. Manage. Eng. 1991.7:314-333.

 Any clause in a public works contract that purports to waive, release,
or extinguish the rights of an equitable adjustment, for delays in per-
forming such contract, if such delay is caused in whole, or in part, by
acts or omissions within the control of the contracting public entity or
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persons acting on behalf thereof, is against public policy and is void

and unenforceable [Colo. Rev. Stat. §24-91-103.5 (l)(a) (1988 Repl.
Vol.)].

As in the other three jurisdictions, this statute does not appear completely
to emasculate NDCs in Colorado. The application of the statute is limited
to "public works contractfs]" [Colo. Rev. Stat. §24-91-103.5 (l)(a)(1988
Repl. Vol.)] and operates only to the extent that the delay was "caused in
whole, or in part, by acts or omissions within the control of the contracting
public entity or persons acting on behalf thereof." Thus, it appears that de-
lays arising from work on nonpublic works contracts as well as delays to
work on public works contracts outside the control of the public entity or
its representatives are exempt from the statute.

While at first glance it appears that the Washington, California, Oregon,

and Colorado statutes might completely emasculate NDCs in those jurisdic-
tions, it is likely, particularly in California, that NDCs may still enjoy some
viability.

'Since these four jurisdictions have, in recent years, enacted legislation

which may restrict the enforceability of NDCs, other jurisdictions may also
do so in the future. Those wishing to utilize NDCs are, therefore, well ad-
vised to consult the current law of their jurisdiction to determine the scope
and extent of any new anti-NDC legislation that may have been enacted [see
e.g., Cal. Civ. Code §2782 (West 1990)]. In addition to the strict anti-NDC
legislation enacted by these four states, it is possible that other types of
legislation may, in some situations, prove troublesome to NDC enforcea-
bility. The anti-indemnification statutes enacted by a number of states are a
good example.

Arbitration
It has been suggested by at least one commentator [Simon, Construction
Law, Claims and Liability, a Current Treatise §8.13-8 (1983)] that parties
wishing to rely on NDCs should not include in their contracts provisions for
binding arbitration with the contractor. Since arbitrators are "not necessarily
bound by set law" they may not follow the law if it is perceived that harsh
and inequitable consequences would result. Thus, if a contractor experiences
a delay and the owner or engineer is protected by a NDC, the arbitrator may
ignore the clause and award damages to the contractor if he or she believes
it would be "fair" to do so. While contract clauses calling for mandatory
binding arbitration may create problems, clauses calling for arbitration at the
discretion of the parties generally will not. It is a simple matter for a party
to opt out of the arbitration. Of course, parties wishing to rely on a NDC
and also submit disputes to arbitration should not agree to binding arbitra-
tion.

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J. Manage. Eng. 1991.7:314-333.

 APPLICATION TO THE ENGINEER

Most contractors experiencing a delay will assert their claims directly against
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the owner. They are not precluded, however, from asserting claims against
other third parties, including the engineer. Claims against the owner usually
sound in either breach of contract, breach of implied warranty, intentional
tort, or negligence. Since there is normally no privity of contract between
the contractor and the engineer, the contractor's claim against the engineer
(or other third parties) is usually based on a theory of intentional tort or
negligence. While it is not possible contractually to disclaim one's inten-
tional torts, it is often possible for one's negligence to be disclaimed by
contract. It is for this reason that an engineer may effectively be included
as a protected party under the NDC even though the engineer is not a party
thereto.

Suing the engineer directly for delay damages appears to be a relatively

recent contractor tactic. These types of suits have arisen because of the rel-
atively recent decisions of many courts not to require contractual privity
between a contractor and an engineer in order for the former to maintain a
negligence action against the latter [see, e.g., A.R. Moyer, Inc. v. Graham,
285 So.2d 397 (Fla. 1973)]. Some states, however, still do require privity
in order for a contractor to maintain a negligence action against an engineer
where the contractor's damages are purely economic (as opposed to damages
resulting from injury to person or property) [see e.g., Blake Construction
Co., Inc. v. Alley, 233 Va. 31, 353 S.E.2d 724 (1987); Santucci Construc-
tion Company v. Baxter & Woodman, Inc., 151 Ill.App.3d 547, 502 N.E.2d
1134 (1986); Bagwell Coating Inc. v. Middle South Energy, Inc., 797 F.2d
1298 (5th Cir. 1986) (applying Mississippi law); and Bernard Johnson, Inc.
v. Continental Constructors, Inc., 630 S.W.2d 365 (Tex.Civ.App. 1982)].
The engineer's greatest danger in this situation lies, perhaps not so much in
the fact that it may be liable for damages, but that it will incur costs in
defending against frivolous and unfounded contractor claims. Even where
contractor claims are legitimate, however, NDCs may still be used to protect
the engineer.

In Bates & Rogers Construction Corporation [109 111.2d 225, 486 N.E.2d
902 (1985)], the contractor's claim against the engineer was based on a neg-
ligence theory. Even though the engineer was not a party to the construction
contract, the court found that the engineer was a third-party beneficiary of
the contract. This was true because "the parties to [the] contract, or at least
the promisee (here the [owner]), intended that the agreement confer a benefit
on [the engineer]" [486 N.E.2d at 906, citing People ex rel. Resnik v. Curtis
& Davis, Architects and Planners, Inc., 78 I11.2d 381, 400 N.E.2d 918
(1980)]. The court further explained that

" . . . the [owner] was largely relying on the professional skill of the
engineer to protect its interests. Given that relationship, it is logical
that the [owner] would contract to exculpate the engineer from dam-
ages for delay in order to ensure that the engineer would exercise its
best judgment and discretion in favor of the [owner]. Had the [owner]
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J. Manage. Eng. 1991.7:314-333.

 not done so, [the engineer's] ability to act for the [owner] could have
been impaired by the threat of lawsuits by contractors adversely af-
fected by the engineer's determinations . . ." (486 N.E.2d at 907.)
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In John E. Green Plumbing & Heating Company, Inc. v. Turner Con-

struction Company [500 F. Supp. 910 (E.D. Mich. 1980), aff'd in part, 742
F.2d 965 (6th Cir. 1984), cert, denied, 471 U.S. 1102, 105 S.Q. 2328, 85
L.Ed.2d 845 (1985)] the defendant, Turner, contracted with the City of De-
troit Building Authority (the authority) to manage the construction of a build-
ing. Plaintiff, Green, contracted separately with the authority to install the
mechanical components of the structure. There was no contractual relation-
ship between Green and Turner, thus Turner was acting in very much the
same contractual capacity as an engineer would act. Green claimed Turner
intentionally and negligently interfered with the work so as to cause Green
delay damages. The construction contract with Green contained a NDC ex-
culpating Turner for delay damages it may have caused. The trial court granted
summary judgment in favor of Turner on the negligence count, but ordered
trial on the intentional interference count so that the parties could present
evidence demonstrating whether Turner acted maliciously, intentionally, or
in bad faith. The court did not explain the theoretical basis for why the NDC
applied to Turner; rather it assumed, without explanation, that it did.

In Peter Kiewit Sons' Co. v. Iowa Southern Utilities Co., [355 F.Supp.
376, 399 (S.D. Iowa 1973)] the contractor, Kiewit, was one of several prime
contractors engaged to work on a power-plant project. Each of the contrac-
tors acted under the direction and supervision of the engineer. When various
construction materials were not timely delivered to the project site by a con-
tractor's supplier, delays in the already tight construction schedule began to
occur. The engineer, acting under contractual authority, ordered Kiewit and
the other contractors to alter the sequence of their work so that the project
would be completed by an important owner deadline. This caused certain
inefficiencies in the work of Kiewit and the other contractors. As a result,
Kiewit filed suit against the owner and the engineer. The court found, inter
alia, that since a NDC was included in the construction contract, and since
neither the owner nor the engineer actively interfered with Kiewit's work,
Kiewit's claim could not stand.

A relatively recent case arising in Louisiana [Farrell Construction Co. v.

Jefferson Parish, 693 F.Supp. 490 (E.D. La. 1988)] illustrates a very in-
teresting proposition. Farrell, the contractor, filed suit against Burk, the en-
gineer, and others, alleging negligent preparation of plans and specifications
and negligent delay in approving shop drawings and issuing change orders.
Farrell sought to recover the delay damages it allegedly incurred thereby.
The construction contract did not contain a NDC protecting the engineer,
but instead included language for the Standard General Conditions of the
Construction Contract promulgated by the Engineers' Joint Contract Docu-
ments Committee (EJDCD) [Engineers' Joint Contract Documents Com-
mittee, Standard General Conditions for the Construction Contract, art. 9.13
at 20 (1983). Similar, but not identical language is included in the 1990
version of the same document. See Engineers' Joint Contract Documents
Committee, Standard General Conditions of the Construction Contract, art.
323

J. Manage. Eng. 1991.7:314-333.

 9.13.1 at 25 (May 20, 1990 Draft)]. Although the EJCDC does not purport
to include a NDC in its general conditions [see, e.g., AGC Standard Sub-
contract Agreement for Building Construction, AGC Form No. 600 (1984),
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AGCC Long Form Standard Subcontract §5 at 3 (1988), and AGCC Short

Form Standard Subcontract §5 at 2 (1989)], the court interpreted the contract
language to foreclose negligence liability against the engineer to the extent
that the engineer's negligent acts occurred after the execution of the con-
struction contract. This meant that Burk was not liable for its allegedly neg-
ligent delays in approving shop drawings and issuing change orders, but that
it might be liable for negligent preparation of the plans and specifications if
Farrell could prove Burk's negligence.

This case is particularly interesting because language not intended to be

a NDC was (to a certain extent) enforced by the court as it it were. Since
it is uncertain whether other courts would follow this same interpretation
and since the EJCDC clause here offered the engineer only partial protection,
it would be unwise to rely solely upon the EJCDC language to offer the
same protection a more deliberately drafted NDC would provide.

Whether courts uphold NDCs in favor of engineers based upon automatic

assumptions that they apply or based upon a third-party beneficiary contract
theory, it is clear that in damages for delay cases, courts have found that if
an engineer was intended to be protected by a NDC, it will have the same
protections afforded an owner under such a clause.

ETHICAL AND ECONOMIC CONSIDERATIONS

ASCE Code of Ethics provides that "[engineers shall act in professional

matters for each employer or client as faithful agents or trustees . . . " [ASCE,
"Code of Ethics," Fundamental Canon 4, as adopted September 25, 1976,
ASCE Official Register, 1982 at 278 (1982)]. Another ASCE publication
states that the engineer " . . . has obligations as trustee to the public interest
as well as to the private interest of clients" (ASCE, "Consulting Engineer-
ing," A Guide for the Engagement of Engineering Services at 1 (1988)]. The
American Consulting Engineers Council further states that "[a] consulting
engineer's highest obligation is to protect the safety, health and welfare of
the public . . . [and] [w]ithin that overall framework . . . [to] operate their
practices so as to serve the best interest of their clients" [Cohen, Consulting
Engineering Practice Manual at 52 (1982)]. These statements suggest that
in addition to designing projects in such a manner as to protect the health,
safety, and welfare of the public, the engineer has a duty to design projects
at an affordable cost to its clients. While most aspects of the affordability
of engineering designs are beyond the scope of this paper, the determination
of whether the inclusion of a NDC in a construction contract is cost bene-
ficial, is an important consideration.

A number of commentators opposing NDCs have argued that the use of

NDCs actually increases, rather than decreases final construction costs, even
on competitively bid projects [see, e.g., comment, When Owners Should
324

J. Manage. Eng. 1991.7:314-333.

 Pay For Construction Delay: Corrino Civetta Construction Corp. and the
No-Damage-For-Delay-Clause, 9 Cardozo L. Rev. at 889 and Clark, Gov-
ernment-Caused Delays in the Performance of Federal Contracts: The Im-
pact of the Contract Clauses, 1963 Mil.L.Rev. 1, 46-47 (Oct. 1963)]. The
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arguments advanced are that: Some contractors will refuse to bid jobs, in-
cluding NDCs, thus resulting in decreased bid competition; contractors will
include arbitrary contingencies in their bids to cover the potentially large
risks of delay; failure to compensate contractors for damages incurred be-
cause of delay will force them out of business, thus decreasing the pool of
available contractors to bid on future work, thus again resulting in decreased
bid competition. Others suggest that reputable contractors will not bid on
jobs including NDCs, thus leaving them for disreputable, claims-oriented
contractors. Still others say that NDCs, by their nature, spawn vexatious
litigation and encourage disputes.

These arguments, however, are factually unfounded. A search of the lit-

erature reveals no statistical, empirical, or factual studies that demonstrate
that absent serious owner misconduct, NDCs increase construction costs at
all, in either the short term or the long term. In fact, some NDC opponents
have actually conceded that the inclusion of NDCs in construction contracts
is really unlikely to increase bid prices on competitively bid projects. This
is true because of the great "difficulty of evaluating [the] risks of delay"
(Walker, Statutory Responses to "No Damage for Delay Clauses," Construc-
tiqn Lawyer, April 1986 at 9) and the "long lists of bidders in recent years,"
coupled with the "overriding need to be low bidder" (comment, When Own-
ers Should Pay For Construction Delay: Corrino Civetta Construction Corp.
and the No-Damage-For-Delay-Clause, 9 Cardozo L. Rev. at 891 n.56.)

Proponents of the NDC have argued that NDCs are "intended to achieve
fiscal stability by ensuring that government officials know at the outset sub-
stantially the full cost they will incur on any construction project" (comment,
When Owners Should Pay For Construction Delay: Corrino Civetta Con-
struction Corp. and the No-Damage-For-Delay-Clause, 9 Cardozo L. Rev.
at 890 n.51, citing Griffin & Grubin, 'Kalisch-Jarcho'-Simple Application
of Old Principles, N.Y.L.J., May 12, 1983, at 1, col.2, at 36, col.2). This
is true because the owner's "[elimination of the need to provide for such
[delay] costs facilitates the budgetary process, reduces the likelihood that
new authorization of funds will be necessary and protects the credit of the
government entity" (National Institute of Construction Law, Inc., Construc-
tion & Design Law § 15.4c at 111.) Furthermore,

[w]hen inserted at the behest of public agencies, restrained as these

almost always are by limited financial authorizations, the object of
such a clause is not only the usually ascribed avoidance of "vexatious"
litigation as to whether delays are reasonable or unreasonable or, for
that matter, real or fancied, but also, hopefully, to discourage dila-
toriness itself [citations omitted. (Kalish-Jarcho, 58 N.Y.2d 377, 448
N.E.2d at 416, 461 N.Y.S.2d at 749)].

The same arguments also largely hold true for nonpublic owners.
325

J. Manage. Eng. 1991.7:314-333.

 If it is true that the inclusion of NDCs in construction contracts results in
little, if any, additional bid costs to the owner and if it is true that a NDC
will frequently protect the owner from potentially large claims, it seems likely
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that the inclusion of a NDC will not increase final construction costs. If this
is true, the inclusion of a NDC in the construction contract is both cost
beneficial to the owner and a good form of inexpensive insurance.

If it is true that the inclusion of a NDC in construction contracts is cost

beneficial to owners, and if it is true that the engineer has a duty to "serve
the best interests of [its] clients" [Cohen, Consulting Engineering Practice
Manual at 52 (1982)], it can be argued that the engineer has an affirmative
duty to recommend that its clients include a NDC in their construction con-
tracts, unless such clauses are otherwise prohibited by law. It is interesting
to note, however, that neither the American Institute of Architects (AIA)
standard form documents nor the EJCDC documents include a NDC. This
is true (perhaps among other reasons) because both of these entities sought
and received Associated General Contractors of America (AGC) approval of
their forms. The federal government also does not include a NDC in the
current versions of its procurement contracts. It has been suggested that this
is because federal construction contracts presuppose that unreasonable delays
are unforseeable (see comment, When Owners Should Pay For Construction
Delay: Corrino Civetta Construction Corp. and the No-Damage-For-Delay-
Clause, 9 Cardozo L. Rev. at 897 n. 91.)

Various other entities, however, have, for varying periods of time, used
NDCs in all of their standard form contracts. Among them are the City of
New York, the New York State Department of Transportation and the Na-
tional Association of Attorneys General (NAAG). The NAAG documents,
however, have engendered a great deal of controversy and their future is
uncertain.

Even some construction industry groups opposing the use of NDCs in

construction contracts include them in their own standard form subcontracts.
Among them are the AGC and the Associated General Contractors of Cal-
ifornia (AGCC) [see, e.g., AGC Standard Subcontract Agreement For Build-
ing Construction, AGC Form No. 600 (1984), AGCC Long Form Standard
Subcontract §5 at 3 (1988), and AGCC Short Form Standard Subcontract
§5 at 2 (1989)].

Since most engineers, as a practical matter, have a great deal of input into
the provisions that will be included in a construction contract, it should not
be difficult to request that the owner insert in the general and/or special
conditions of the contract, a NDC designed to protect both the owner and
the engineer. Few owners should object to the inclusion of the engineer in
the exculpatory language of the NDC as it should cost the owner little or
nothing to do so and its inclusion, in fact, will likely benefit the owner. This
is true because a contractor will often assert delay claims against the owner
when the alleged culpability actually lies with the engineer (e.g., delay claims
founded upon negligent project design or negligent delay in approving shop
drawings and change orders). If the NDC bars recovery as against the en-
gineer, there will often be no legitimate reason for the contractor to assert
326

J. Manage. Eng. 1991.7:314-333.

 the claim against the nonculpable owner either. If, however, the engineer is
not included in the NDC, the contractor, sensing a potentially viable claim,
will likely name, in its claim for damages, the engineer, the owner, and
everyone else even remotely connected with the project in an attempt to find
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a deep and open pocket.

If the owner and the engineer are able to reduce their risks by including
both parties in the NDC and if it costs the engineer and the owner essentially
nothing to receive that benefit, it is cost beneficial to both parties to be
included in the exculpatory language of the NDC.

Even though the use of NDCs may be economically cost beneficial, their
use is likely not without problems. Perhaps the most legitimate complaints
about NDCs relate not to their economic impacts, but to their effects upon
the relationships between the parties on the construction project. For ex-
ample, a NDC may create strained relationships and feelings of hostility
rather than an atmosphere of trust and cooperation among the project par-
ticipants. If a contractor feels it may incur a loss on the project as a result
of the enforcement of the NDC, it may attempt to cut corners, thus pro-
ducing a project of potentially lesser quality. Moreover, the parties protected
by the NDC may believe it offers them more protection than it actually does.
This may result in actions on their part that may give rise to exposure to an
unprotected contractor delay claim. Furthermore, if a NDC is present, the
parties protected thereby may be tempted to use it (i.e., to cause a delay
against which the parties do have protection). If they do use it, precedent
will have been established, thus increasing contractor hostility and making
it more likely that bidders on future projects will have a legitimate reason
to include a delay contingency in their bids (some of these results, as sus-
tained by the New York City Transit Authority, are illustrated in Engineering
News Record, April 19, 1990 at 15, col. 1 and at 66, col. 1).

While the actual economic impacts of NDCs in the construction industry

are far from certain, it appears that both the owner and the engineer are able
to be included in a NDC in a construction contract at little or no economic
cost, while at the same time receiving a substantial protective benefit. At
the same time, however, the owner and engineer should be aware that they
may be required to sustain certain noneconomic, relationship-related im-
pacts. These effects should be reduced, however, if owner and engineer caused
delays are minimized.

GUIDELINES FOR DRAFTING N D C S

Before drafting a NDC to protect the owner and the engineer, certain pre-
liminary matters should be undertaken. First, the law of the governing ju-
risdiction should be consulted to determine the limitations and restrictions
that may apply to NDC enforceability. Both case law and statutory law should
be examined. Second, if the law of more than one jurisdiction may govern
(e.g., the project, the contractor, the owner, or the engineer are in different
states) research into choice of law problems may also need to be undertaken.
327

J. Manage. Eng. 1991.7:314-333.

 After these preliminary matters have been performed, it will be a much
easier task to tailor the NDC to the jurisdiction whose law will govern and
to the particular needs of the parties. In addition to these preliminary matters,
an examination of the law of NDCs reveals other guidelines that should be
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followed in order to properly draft valid, enforceable, and protective clauses.

Since a NDC is not enforceable where it does not apply and since one of
the common-law exceptions to enforceability is founded on uncontemplated
delays, it is wise to include a "laundry list" of all conceivable potential
project delays. This list should include not only the standard delays that
occur on many projects, but also peculiar delays that may occur on the par-
ticular project, (see Lesser, "The 'No Damage for Delay' Clause: Avoiding
Delay Claims in Construction," Trial Diplomacy Journal, Winter 1987 at
19-20. See also National Institute of Construction Law, Inc., Construction
and Design Law, §15.4c at 115). In addition to this "laundry list," the draf-
ter should also include a broadly worded "catch all clause" to cover unfor-
seeable delays. There is the risk, however, that this "catch all clause" will
not be enforced in all jurisdictions.

In addition to stating that there will be no money damages for delay, it

is important to state that there will be no money damages for hindrance,
interference, or obstruction either. Although hindrance, interference, and ob-
struction may appear to be implicitly included in the definition of delay,
some courts have drawn a distinction [see, e.g., John E. Green Plumbing
& Heating Company, Inc. v. Turner Construction Company, 742 F.2d 965
(6th Cir. 1984) cert, denied, 471 U.S. 1102, 105 S.Ct. 2328, 85 L.Ed.2d
845 (1985)]. In order to be protected from delay claims of whatever appel-
lation, it is important to preclude recovery for claims resulting from delay,
hindrance, interference, or obstruction.

In the event a delay does occur, it is important that the contractor be given
some type of compensation [Lesser, "The 'No Damage for Delay' Clause:
Avoiding Delay Claims in Construction," Trial Diplomacy Journal, Winter
1987 at 20. See also Ericksen v. Edmonds School District No. 15, Snohom-
ish County, 13 Wash.2d 398, 125 P.2d 275 (1942)]. Most often, this com-
pensation is an extension of the contract time. If no extension of time is
granted, the contractor may claim that its work was constructively acceler-
ated and attempt to recover additional compensation on those grounds. Al-
though a time extension should be granted, it need not be automatically granted.
A provision allowing the contractor to request an extension of time within
a certain period after it becomes aware of the delay may be appropriate.
Furthermore, language stating that an extension of time is the contractor's
sole and exclusive remedy should alleviate any doubts as to the meaning to
be attached to the clause [see Lesser, "The 'No Damage for Delay' Clause:
Avoiding Delay Claims in Construction," Trial Diplomacy Journal, Winter
1987 at 20, citing K & F Construction v. Los Angeles City Unified School
District, 123 Cal.App.3d 1063, 176 Cal.Rptr. 842 (1981) and City of Or-
lando v. Murphy, 84 F.2d 531, 535-36 (5th Cir. 1936)].

As was explained in the Bates & Rogers [109 111. 2d 225, 486 N.E.2d
902 (1985)] case, the engineer must be identified as an intended beneficiary
328

J. Manage. Eng. 1991.7:314-333.

 of the owner's NDC or otherwise be appropriately named in the exculpatory
language of the clause. If not, the engineer risks not being covered by the
NDC language [but see L. K. Comstock & Company, Inc. v. Morse/UBM
Joint Venture, 153 Ill.App.3d 475, 505 N.E.2d 1253 (1987), where although
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the third-party construction manager was not explicitly named in the NDC,
it was still protected against the delay claims of the contractor]. Although
the parties, for whatever reason, may not wish to include either the engineer
or the owner in the NDC, both parties will be more fully protected if both
are named in the clause.

There should be no provision in the construction contract calling for bind-

ing arbitration between the parties. If arbitration is desired, nonbinding ar-
bitration may be selected.

In order for the NDC to apply to subcontractors of the prime contractor,

it is often necessary to include language in the construction contract to the
effect that the prime contractor will incorporate the NDC provisions into its
agreements with subcontractors [see National Institute of Construction Law,
Inc., Construction & Design Law § 15.4c at 113, and United States ex rel.
Seminole Sheet Metal Co. v. SCI, Inc., 828 F.2d 671 (11th Cir. 1987)].

A separate clause allowing changes in the work should be included in the

construction contract as well. If no such provision is included, any attempt
to change the work could be considered a breach of contract. Similarly,
delay damages resulting from changes to the work may be considered to
have been uncontemplated.

No language in the construction contract should expressly or impliedly

limit damages under the NDC to contract damages (e.g., by calling them
special damages or consequential damages, etc.) (see Lesser, "The 'No Damage
for Delay' Clause: Avoiding Delay Claims in Construction," Trial Diplo-
macy Journal, Winter 1987 at 20.). In fact, "[t]he best approach to achieve
complete exoneration for all damages is to draft a clause with broad refer-
ence to damages, such as loss of profits, loss of use, home-office overhead
expenses, and equipment rental and to all claims, including delays attrib-
utable to breach of contract or tort.

The NDC must be written in clear, concise, and unambiguous language

and it "must be explicitly contained in the contract" (National Institute of
Construction Law, Inc., Construction & Design Law §15.4c at 113). If not,
ambiguities may be construed against the drafter and there may be a question
as to whether the NDC was really intended to be applicable.

On Environmental Protection Agency (EPA) grant funded projects, certain

EPA model contract clauses may be required by law to be included in the
construction contract (see 40 C.F.R. 35, Subpart E, Appendix C-2 (1975);
40 C.F.R. 33.1030 (1983); and O.M.B. Circular A-102.) These clauses may
conflict with language contained elsewhere in the contract or the clauses
might not be included at all. In either event, the EPA model clauses will
likely be deemed to supersede conflicting or nonexistent language [Lisbon
Contractors v. Miami-Dade Water and Sewer Authority, 537 F.Supp. 175,

329

J. Manage. Eng. 1991.7:314-333.

 178 (S.D. Fla. 1982)], thus rendering unenforceable any NDC that may have
been included in the contract.

Although it is clear that all NDCs are not always enforceable, a well-
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drafted NDC will withstand attack more successfully than its poorly drafted
counterpart. The aforementioned guidelines should aid the practitioner in de-
veloping a NDC that is valid, enforceable, protective of the owner's and
engineer's interests, and able to withstand legal attack.

W H A T TO D O IN THE EVENT OF CONTRACTOR DELAY

Since the determination of whether a NDC will be enforced is often fac-

tually sensitive, it is important to establish facts suggesting to both the court
and the contractor that enforcement is appropriate. Perhaps the most obvious
and the most important suggestion is this: Do not act in bad faith toward
the contractor; do not actively interfere with its work; and do everything
possible to prevent the delay from becoming unreasonably lengthy.

The underlying theme of these suggestions is this: Be fair to the contrac-

tor. In fact, it is wise to be even more than fair to the contractor. Do every-
thing possible to prevent any delay from occurring. If a delay does occur,
however, it should not be taken advantage of merely to "show the contractor
who's boss." In the long run, delays and unfair actions toward the contractor
will benefit no one; neither contractors, engineers, nor owners.

In the event a delay does occur, it is important to develop evidence show-

ing the cause of the delay, its duration, and the difficulties encountered as
a result thereof. An accurate and complete construction diary, copies of all
correspondence, copies of the contractor's schedules, and all of the other
paperwork normally generated during the design and construction process
should establish a sufficient paper trail to show the facts as they actually
occurred.

In certain situations a contractor may experience an owner or engineer

caused delay that falls outside the protection of the NDC. In order to defeat
a contractor claim in that situation, it may be possible to demonstrate that
the delay was not on the contractor's critical path and that the delay was
cured before the float time on that particular work item expired. If this is
the case, the contractor may not have actually suffered any damages even
though the owner's or engineer's culpable actions caused the delay. For this
reason, it may be useful to prepare an "as-built" critical path method (CPM)
diagram to investigate the true time impact of claimed delays.

After drafting a valid, protective, and enforceable NDC, the next step is
to do everything possible to prevent a delay from occurring. If a delay does
occur, however, the engineer should treat the contractor fairly and gather
truthful factual evidence showing the cause, nature, duration, and impact of
the delay. All of this will be necessary to invoke the full power of the NDC
in the event a contractor delay claim is filed.
330

J. Manage. Eng. 1991.7:314-333.

 CONCLUSION

The NDC, often used by owners to protect against construction delay claims,
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can also be used to protect the engineer. Although such clauses are not a
panacea, a well-drafted NDC, along with responsible action on the part of
the engineer, will constitute a formidable defense to the delay claims (real
or fancied) asserted against the engineer by construction contractors.

APPENDIX I. SUGGESTED NO-DAMAGE-FOR-DELAY CLAUSE

If the contractor is delayed, hindered, interfered with, or obstructed at any

time in the progress of the work by any act, omission, or neglect of the
owner, the engineer, their officers, directors, agents, employees, consul-
tants, or representatives, such act, omission, or neglect including, but not
limited to, the following events:

1. Changes in the work.

2. Adverse soil conditions.
3. Delays specifically authorized by the owner or engineer.
4. Revisions to the plans, specifications, or contract documents.
5. Unavailability or late delivery of owner furnished materials, supplies, ser-
vices, or utilities.
6. Unavailability or late delivery of engineer furnished materials, supplies,
services, or utilities.
7. Differing site conditions.
8. Owner's failure to acquire lands, rights-of-way, or easements.
9. Owner's failure to furnish contractor with access to the site.
10. Engineer's failure timely to approve plans, shop drawings, or other con-
tractor submittals.
11. Owner's failure to provide accurate and/or complete plans, specifications,
or contract documents.
12. Discovery of archaeological artifacts or other cultural resources.
13. Discovery of human remains.
14. Landslides.
15. Legal or equitable actions brought by third parties.
16. Design changes.
17. Discovery of endangered species.
18. Discovery of toxic or hazardous material.
19. Design errors.
331

J. Manage. Eng. 1991.7:314-333.

 20. Inspection of or failure to inspect the work.
The contract time shall be extended by change order for such reasonable
time as the owner may determine that such act, omission, or neglect has
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delayed the critical path of the work or overall completion of the work after
considering the advice of the engineer, but only if the contractor complies
with the notice and documentation requirements set forth herein.

Any claim for extension of time shall be made in writing to the engineer
and the owner, not more than 10 calendar days from the beginning of the
event causing the delay, hindrance, interference, or obstruction. The notice
shall indicate the nature of the event, its anticipated length, and its probable
effect upon the progress of the work. If the event causing the delay, hin-
drance, interference, or obstruction is continuing, the contractor must give
written notice every month at the same time it submits its request for pay-
ment to the owner. Within 30 days after the elimination of any such event,
the contractor shall submit further documentation of the event and a formal
change order request for an extension of time for any delay, hindrance, in-
terference, or obstruction caused thereby. The written request for time ex-
tension shall state the cause of the delay, hindrance, interference or obstruc-
tion, the number of calendar days extension requested, and such analysis
and documentation of the CPM schedule of the project and other documen-
tation to demonstrate a delay in the critical path of the work or overall project
completion. If the contractor does not comply with the notice and docu-
mentation requirements set forth, the claim for extension of time shall be
waived by the contractor.

Unless otherwise expressly provided, extensions of time shall be the con-

tractor's sole and exclusive remedy for any and all damages resulting from
such delay, hindrance, interference, or obstruction, including, but not lim-
ited to, delay, hindrance, interference, or obstruction attributable to breach
of contract, breach of implied warranty, or tort, and including, but not lim-
ited to, loss of profits, loss of use, material and/or labor escalation, home
and project office overhead expenses, and equipment rental. No payment or
compensation of any kind shall be made to the contractor for damages be-
cause of such delay, hindrance, interference, or obstruction of whatever du-
ration in the orderly progress of the work, whether such delay, hindrance,
interference, or obstruction be reasonable or unreasonable, avoidable or un-
avoidable.

Contractor expressly agrees not to make delay claims, and hereby waives
any claim for damages against the owner, the engineer, their officers, di-
rectors, agents, employees, consultants, and representatives on account of
any such delay, hindrance, interference, or obstruction from any cause or
event whatsoever, including but not limited to the aforesaid causes and events
and agrees that contractor's sole and exclusive right, and remedy in the case
of any such delay, hindrance, interference or obstruction shall be an exten-
sion of the time fixed for completion of the contract. Without limitation, the
owner's exercise of its rights under the changes in the work clause, regard-
less of the extent or number of such changes, shall not under any circum-
stances be construed as a compensable delay, it being acknowledged that
332

J. Manage. Eng. 1991.7:314-333.

 the contract amount includes and anticipates any and all such delay, hin-
drance, interference, and obstruction whether it be reasonable or unreason-
able, avoidable or unavoidable [adapted from National Association of At-
torneys General, Model Design and Construction Documents at 122 (1988).
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It is intended that this language be adapted and modified to suit the needs
and circumstances of the parties who use it. Please note that special problems
may result if this NDC is used in Washington, California, Oregon, or Col-
orado. In addition to this NDC, it will be necessary to include a separate
"changes to the contract time" clause to cover excusable but noncompens-
able contractor delays such as acts of God, forces majeures, governmental
action or inaction, etc.].

APPENDIX II. REFERENCES

ASCE official register. (1982). ASCE, 278.

Cohen. (1982). Consulting engineering practice manual. 52.
Consulting engineering, guide for engagement of engineering services. (1988).
ASCE, 1.
Engrg. News Record. (1990). Apr., 15, 66.
"Fundamental Canon 4." (1976). Code of ethics, ASCE, 4.
Lesser. (1987). "The 'no damage for delay' clause: Avoiding delay claims in con-
struction." Trial Diplomacy J., Winter, 19-20.
Public contract newsletter. (1990). Section of Public Contract Law, American Bar
Assoc, 12.

333

J. Manage. Eng. 1991.7:314-333.