Indian Government construction contracts frequently contain non-negotiable clauses that restrict claims for interest on amounts withheld and deny compensation for delays covered by extensions of time. Such clauses are commonly found in standard-form contracts used by public agencies such as the Indian Railways, NHAI, KPWD and K-RIDE, and are generally defended on the basis of freedom of contract. This paper examines the enforceability of such exclusionary clauses where delay or non-payment is caused by the employer’s own conduct, including arbitrary deductions, failure to provide land or drawings, delayed certification, or non-performance of reciprocal contractual obligations. The research adopts doctrinal and comparative methods and analyses the Indian Contract Act, 1872, the Interest Act, 1978, the Arbitration and Conciliation Act, 1996 and the MSMED Act, 2006, along with leading judicial decisions on government works contracts. The paper specifically contrasts the contractual approach in Ramnath International Construction (P) Ltd. v. Union of India with the public-policy reasoning adopted in Simplex Concrete Piles (India) Ltd. v. Union of India and MBL Infrastructures Ltd. v. Delhi Metro Rail Corp. The analysis argues that while reasonable and symmetrical risk-allocation clauses may remain enforceable, absolute exclusions that permit public employers to avoid liability for their own breach should be treated as void under Section 23 of the Indian Contract Act. It further proposes a statutory amendment invalidating clauses that exclude liability for wilful breach, arbitrary withholding or employer-induced delay, together with corresponding reforms to Government Construction Contracts to protect contractors from wrongful retention of payments.