“No Damage for Delay” Clauses Are Generally Valid and Enforceable, with Certain Limited Exceptions

Kalisch-Jarcho, Inc. v. City of New York, 58 N.Y.2d 377 (1983)

In Kalisch-Jarcho, the city entered into a contract with a contractor for the construction of a ventilation system in police headquarters.  The contract contained an exculpatory clause, by which the contractor agreed to make no claims for delay damages occasioned by any act or omission by the city.  After trial on the scope and validity of the delay damages clause, the Court of Appeals ruled that clauses barring a contractor from recovering damages for delay in the performance of a contract are valid, but they will not prevent the recovery of damages resulting from the contractee’s grossly negligent or willful conduct which “smacks of intentional wrongdoing.”