In my latest article for the Daily Journal of Commerce, I provide a few suggestions for contractors, and perhaps project owners as well, to manage risk through a construction contract. Provisions that can be included in a contract to achieve that end might include:
- The owner limits its potential claims to direct damages and waives claims for consequential damages.
- The contractor’s maximum liability to the owner is capped at a stated sum.
- The contractor’s potential liability for late performance is limited to a set amount per calendar day.
- The contractor’s bid includes contingency to guard against unforeseen risks, or provisions to address material price escalation or “force majeure” events such as pandemics.
Read the full article here.
Originally published as an Op-Ed by the Oregon Daily Journal of Commerce on January 20, 2022.