New Trends and Bad Results in Construction Contracts, Part II

Abstract

Part II of “New Trends and Bad Results in Construction Contracting” offers a review of a few “problem” trends that increasingly appear in the construction industry, including differing site conditions clauses that shift risks to the contractor; consequential damages clauses that could take away the contractor’s profit and more; clauses that promise alternative dispute resolution that instead set up roadblocks and hurdles that delay resolution and increase the cost of settling disputes; and clauses that give away the contractor’s claims and rights to lien the job from the outset. The pressures leading to these trends are primarily economic and have resulted in (among other things) more risk for the contractor. This paper discusses areas of increased risk found in today’s construction contracts, the reasons why they have appeared and what a contractor should do to mitigate these “new” risks.