Court Strikes Down 'No Damages for Delay Clause" in Public Contract

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Many contracts, including contracts drafted by public entities in Virginia, contain clauses that contain restrictions on a contractor's ability to recover its hard and soft costs incurred due to project delays caused by the Owner. The Virginia Code, however, expresses the public policy that such "no damage for delay" clauses are prohibited on Virginia public projects. In 2009, the Supreme Court of Virginia ruled definitively that such clauses are unenforceable, even if they only indirectly limit a contractor's recovery rights.

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