'No Damages for Delay' Clause in Construction Contract Does Not Extend to Other Parties Not Named in Contract

According to the Third District Court of Appeal, a “No Damages for Delay” clause in a contract only protects parties expressly named in the contract, not other parties.

Perez-Gurri Corp. v. McLeod, 42 Fla. L. Weekly D2489a, Florida’s Third District Court of Appeal, November 22, 2017; Perez-Gurri Corp. v. McLeod, 42 Fla. L. Weekly D2487c, Florida’s Third District Court of Appeal, November 22, 2017. 

The Perez-Gurri Corporation (“General Contractor”) was the general contractor for a renovation project in the City of Miami (“City”). The City subcontracted with an architect (“Architect”), who then subcontracted with several engineers (“Engineers”) to provide services for the project. When construction on the renovation project was delayed, the General Contractor sued the Architect and the Engineers in separate actions.

In the case against the Engineers, the General Contractor alleged in its fourth amended complaint that the Engineers committed professional malpractice that delayed the construction. The Engineers moved to dismiss the complaint, arguing that a “No Damages for Delay” clause in the contract between the General Contractor and the City insulated the Engineers from liability. The trial court entered an order granting the Engineers’ motion to dismiss, and the General Contractor appealed.

In the case against the Architect, the General Contractor alleged in its fourth amended complaint that the Architect committed professional malpractice that delayed the construction. The Architect moved for summary judgment on the basis that the General Contractor’s claim was barred by the “No Damages for Delay” clause in the contract between the General Contractor and the City. The trial court granted the Architect’s motion for summary judgment, and the General Contractor appealed.

In both cases, the Third District Court of Appeal reversed and remanded, holding that the “No Damages for Delay” clause in the contract between the General Contractor and the City did not insulate the Architect or the Engineers from liability. As explained by the court, the “No Damages for Delay” clause contains two sentences stating that the General Contractor is barred from asserting any claims against the City arising out of a delay in the construction of the project: (1) “No claim . . . shall be made or asserted against City by reason of any delays except as provided herein,” and (2) “Contractor shall not be entitled to an increase in the Contract price or payment or compensation of any kind from City . . . arising because of delay.”

While these sentences clearly state that the General Contractor is barred from suing the City for delay damages, there are no sentences in the contract expressly stating that the General Contractor is barred from suing any other party—such as the Architect or Engineers—for delay damages. Reading the contract in its entirety, the court concluded that the protections established by the “No Damages for Delay” clause extended only to the City. Therefore, the General Contractor was not contractually barred from bringing delay damages claims against the Architect and the Engineers.