What are the disadvantages to having a no damages for delay clause in a construction contract?

Question

What will be an ideal response?

Answer 1

The disadvantages of having a no damages for delay clause in a construction contract are that it relieves owners from liability for delay damages on construction projects. This is an exculpatory clause (clears someone from an alleged fault) that purports to excuse an owner from contractual liability for damages due to delays caused by the owner. Negative aspects of the clause include (Postner and Rubin 1992):

a) This clause forces contractors to include high cost of delay contingencies in their
bids. Contractors have to allow for delay damages that may not occur. This will
artificially inflate bids.
b) Some contractors will refrain from bidding since contractors prefer to bid on
certainties. There is no way to estimate the contingency amount for delay
damages.
c) Strict enforcement of the clause would cause contractor losses, and could cause
contractor defaults.
d) Litigation might increase as attempts are made by contractors to find exceptions to
the harsh application of the clause.