{"id":883346,"date":"2015-09-24T13:39:13","date_gmt":"2015-09-24T19:39:13","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=883346"},"modified":"2015-09-24T13:43:31","modified_gmt":"2015-09-24T19:43:31","slug":"construction-contracts-design-construction-liability-waivers","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/construction-contracts-design-construction-liability-waivers\/","title":{"rendered":"Construction Contract Design & Construction Liability Waivers"},"content":{"rendered":"

Advise & Consult, Inc. | September 24, 2015<\/p>\n

A construction contract is\u00a0now more and more frequently being written to include liability waiver clauses.\u00a0 These clauses are also growing in diversity as to which clause will limit the liability of each party included in the contract.\u00a0 Lawsuits involving design professionals have been trending upwards for a few years now, and some people speculate that this is still a fairly untapped market for litigation and that we could see even a greater focus on defects arising from the design side involving architects and engineers.<\/p>\n

As is typical in most any contract, clauses and such are hidden either in the fine print or at the end of lengthy proposals.\u00a0 Here are some typical types of clauses that you should be aware of either to include when writing your next construction contract or when reviewing a construction contract on behalf of your client.<\/p>\n

This list<\/a> is generated by Eric A. Grasberger at Stoel Rives:<\/p>\n

1.\u00a0\u00a0\u00a0\u00a0\u00a0 The Consequential Damages (CD) Waiver<\/p>\n

Consequential damages consist primarily of lost revenue from the inability to use a completed project.\u00a0 Whether composed of lost rents in apartment projects or lost sales of manufactured products, consequential damages are the very dollars the project was built to generate.\u00a0 Like all liability waivers, the CD waiver is often sold as \u201cstandard in industry,\u201d even though many upstream parties successfully avoid the clause in negotiations.\u00a0 Consequential damages can be as great or greater than the cost to repair a defective facility.\u00a0 They can also be covered under commercial general liability policies and professional liability policies carried by contractors, designers, suppliers and manufacturers.\u00a0 The cost of these policies is (directly or indirectly) a cost of the project that upstream parties bear, so waiving the benefit of a policy you paid for is uniquely unsavvy.<\/p>\n

2.\u00a0\u00a0\u00a0\u00a0\u00a0 The Limitation of Liability (LOL)<\/p>\n

Why waive only one type of liability (like consequential damages) when you can waive them all?\u00a0 LOL clauses usually limit all types of liability and damages, and are the most dangerous of all waiver clauses.\u00a0 For some contracts, LOL clauses can appeal to the upstream parties\u2019 sense of fairness or at least their practical business sense.\u00a0 Examples include (1) geotechnical investigations that sample minute portions of a site to determine the overall soil profile for the project and (2) manufacturing projects where the facility will generate more revenue in one month than the cost to build the project.\u00a0 In these cases, exposing the vendor to unlimited liability grossly disproportionate to the fee earned would limit or extinguish the number of vendors available to provide the service.\u00a0 But most LOL clauses cannot be justified.\u00a0 Why should the upstream party bear the liability of a failure by the downstream party?\u00a0 Almost all LOL clauses start with a dollar limit that is disproportionately low compared with the owners\u2019 risk and the vendors\u2019 insurance limits or other assets.\u00a0 Like CD waivers, leaving a proposed LOL clause in the contract, without at least negotiating conditions and reasonable dollar limits, reveals an unhealthy level of optimism.<\/p>\n

3.\u00a0\u00a0\u00a0\u00a0\u00a0 The Warranty Illusion<\/p>\n

Some warranties are great.\u00a0 Many are not.\u00a0 Our eyes focus on the number of years of \u201cprotection\u201d while failing to see the many limitations imposed by the fine print.\u00a0 To the sophisticated purchaser, fancy colored ribbon printed on the border of the warranty page is a red flag.\u00a0 The liability limitations found within a warranty may justify relabeling the document a \u201cDisclaimer,\u201d not a \u201cWarranty,\u201d and you may be better off with no warranty at all.\u00a0 The limitations are not just limitations on the warranty itself, but on all damages that the product or service may cause to the purchaser.\u00a0 Windows, roofing products, HVAC equipment and heavy machinery all carry warranties that deserve a careful read.\u00a0 Warranties or guaranties offered by service providers can also disguise unfavorable terms that should be avoided.\u00a0 Especially if the volume of the product or service purchased is large, the consumer has leverage and should not assume the warranty is nonnegotiable.<\/p>\n

4.\u00a0\u00a0\u00a0\u00a0\u00a0 Options<\/p>\n

There are several other types of liability limits and disclaimers, but they are easy to spot if you look for them.\u00a0 Many can be avoided completely once spotted, and almost all can be negotiated to more reasonable conditions and limits.\u00a0 Here are some common negotiating points:\u00a0 waivers should not limit recovery of insurance proceeds, waivers should not waive completely uninsured claims or damages, liability limits that exceed the insurance policy limits and\/or proceeds encourage the liable party to push for full payout from the policy, waivers should be void if the vendor fails to maintain the insurance coverages and limits required by the contract, and waivers should cover only the direct vendor and not sub-tier providers.\u00a0 Finally, limitations of liability should be for dollar amounts large enough to encourage careful vendor performance, and large enough to provide a meaningful upstream remedy, but not so large that they create risk unreasonably disproportionate to the vendor\u2019s fee and its ability to control the project outcome.<\/p>\n","protected":false},"excerpt":{"rendered":"

Advise & Consult, Inc. | September 24, 2015 A construction contract is\u00a0now more and more frequently being written to include liability waiver clauses.\u00a0 These clauses are also growing in diversity as to which clause will limit the liability of each party included in the contract.\u00a0 Lawsuits involving design professionals have been trending upwards for a… Continue reading Construction Contract Design &amp; Construction Liability Waivers<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9],"tags":[72,284,8832],"class_list":["post-883346","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","tag-construction-contracts-2","tag-design-professionals","tag-liability-waiver-clauses","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nConstruction Contract Design &amp; Construction Liability Waivers - Advise & Consult, Inc.<\/title>\n<meta name=\"description\" content=\"A construction contract is now more and more frequently being written to include liability waiver clauses.\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/construction-contracts-design-construction-liability-waivers\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Construction Contract Design &amp; Construction Liability Waivers - Advise & Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"A construction contract is now more and more frequently being written to include liability waiver clauses.\" \/>\n<meta property=\"og:url\" content=\"https:\/\/www.myconstructionexpert.com\/blog\/construction-contracts-design-construction-liability-waivers\/\" \/>\n<meta property=\"og:site_name\" content=\"Advise & Consult, Inc.\" \/>\n<meta property=\"article:publisher\" content=\"https:\/\/www.facebook.com\/Advise-Consult-Inc-126949043996790\/\" \/>\n<meta property=\"article:published_time\" content=\"2015-09-24T19:39:13+00:00\" \/>\n<meta property=\"article:modified_time\" content=\"2015-09-24T19:43:31+00:00\" \/>\n<meta name=\"author\" content=\"admin\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:creator\" content=\"@adviseconsult\" \/>\n<meta name=\"twitter:site\" content=\"@adviseconsult\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"admin\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"4 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"Article\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/construction-contracts-design-construction-liability-waivers\/#article\",\"isPartOf\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/construction-contracts-design-construction-liability-waivers\/\"},\"author\":{\"name\":\"admin\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/0a11abe008083d5fb19c2b0feefe7bd7\"},\"headline\":\"Construction Contract Design &amp; Construction Liability Waivers\",\"datePublished\":\"2015-09-24T19:39:13+00:00\",\"dateModified\":\"2015-09-24T19:43:31+00:00\",\"mainEntityOfPage\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/construction-contracts-design-construction-liability-waivers\/\"},\"wordCount\":833,\"commentCount\":0,\"publisher\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#organization\"},\"keywords\":[\"construction contracts\",\"Design Professionals\",\"Liability Waiver Clauses\"],\"articleSection\":[\"Construction Contracts\"],\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"CommentAction\",\"name\":\"Comment\",\"target\":[\"https:\/\/www.myconstructionexpert.com\/blog\/construction-contracts-design-construction-liability-waivers\/#respond\"]}]},{\"@type\":\"WebPage\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/construction-contracts-design-construction-liability-waivers\/\",\"url\":\"https:\/\/www.myconstructionexpert.com\/blog\/construction-contracts-design-construction-liability-waivers\/\",\"name\":\"Construction Contract Design &amp; Construction Liability Waivers - Advise & Consult, Inc.\",\"isPartOf\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#website\"},\"datePublished\":\"2015-09-24T19:39:13+00:00\",\"dateModified\":\"2015-09-24T19:43:31+00:00\",\"description\":\"A construction contract is now more and more frequently being written to include liability waiver clauses.\",\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/www.myconstructionexpert.com\/blog\/construction-contracts-design-construction-liability-waivers\/\"]}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#website\",\"url\":\"https:\/\/www.myconstructionexpert.com\/blog\/\",\"name\":\"Advise & Consult, Inc.\",\"description\":\"Construction Expert Witnesses\",\"publisher\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#organization\"},\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/www.myconstructionexpert.com\/blog\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Organization\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#organization\",\"name\":\"Advise & Consult\",\"url\":\"https:\/\/www.myconstructionexpert.com\/blog\/\",\"logo\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/logo\/image\/\",\"url\":\"https:\/\/www.myconstructionexpert.com\/blog\/wp-content\/uploads\/2015\/11\/AC-Red-Logo.png\",\"contentUrl\":\"https:\/\/www.myconstructionexpert.com\/blog\/wp-content\/uploads\/2015\/11\/AC-Red-Logo.png\",\"width\":162,\"height\":75,\"caption\":\"Advise & Consult\"},\"image\":{\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/logo\/image\/\"},\"sameAs\":[\"https:\/\/www.facebook.com\/Advise-Consult-Inc-126949043996790\/\",\"https:\/\/x.com\/adviseconsult\",\"https:\/\/www.linkedin.com\/company-beta\/204526\/\",\"https:\/\/www.youtube.com\/user\/MrConstructionExpert\"]},{\"@type\":\"Person\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/0a11abe008083d5fb19c2b0feefe7bd7\",\"name\":\"admin\",\"image\":{\"@type\":\"ImageObject\",\"inLanguage\":\"en-US\",\"@id\":\"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/image\/\",\"url\":\"https:\/\/secure.gravatar.com\/avatar\/b01e71b7acadd7657af782b7ad1a30cc?s=96&d=mm&r=pg\",\"contentUrl\":\"https:\/\/secure.gravatar.com\/avatar\/b01e71b7acadd7657af782b7ad1a30cc?s=96&d=mm&r=pg\",\"caption\":\"admin\"},\"sameAs\":[\"http:\/\/www.expertwitnessinconstruction.com\"]}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Construction Contract Design &amp; Construction Liability Waivers - Advise & Consult, Inc.","description":"A construction contract is now more and more frequently being written to include liability waiver clauses.","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/www.myconstructionexpert.com\/blog\/construction-contracts-design-construction-liability-waivers\/","og_locale":"en_US","og_type":"article","og_title":"Construction Contract Design &amp; Construction Liability Waivers - Advise & Consult, Inc.","og_description":"A construction contract is now more and more frequently being written to include liability waiver clauses.","og_url":"https:\/\/www.myconstructionexpert.com\/blog\/construction-contracts-design-construction-liability-waivers\/","og_site_name":"Advise & Consult, Inc.","article_publisher":"https:\/\/www.facebook.com\/Advise-Consult-Inc-126949043996790\/","article_published_time":"2015-09-24T19:39:13+00:00","article_modified_time":"2015-09-24T19:43:31+00:00","author":"admin","twitter_card":"summary_large_image","twitter_creator":"@adviseconsult","twitter_site":"@adviseconsult","twitter_misc":{"Written by":"admin","Est. reading time":"4 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"Article","@id":"https:\/\/www.myconstructionexpert.com\/blog\/construction-contracts-design-construction-liability-waivers\/#article","isPartOf":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/construction-contracts-design-construction-liability-waivers\/"},"author":{"name":"admin","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/0a11abe008083d5fb19c2b0feefe7bd7"},"headline":"Construction Contract Design &amp; Construction Liability Waivers","datePublished":"2015-09-24T19:39:13+00:00","dateModified":"2015-09-24T19:43:31+00:00","mainEntityOfPage":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/construction-contracts-design-construction-liability-waivers\/"},"wordCount":833,"commentCount":0,"publisher":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/#organization"},"keywords":["construction contracts","Design Professionals","Liability Waiver Clauses"],"articleSection":["Construction Contracts"],"inLanguage":"en-US","potentialAction":[{"@type":"CommentAction","name":"Comment","target":["https:\/\/www.myconstructionexpert.com\/blog\/construction-contracts-design-construction-liability-waivers\/#respond"]}]},{"@type":"WebPage","@id":"https:\/\/www.myconstructionexpert.com\/blog\/construction-contracts-design-construction-liability-waivers\/","url":"https:\/\/www.myconstructionexpert.com\/blog\/construction-contracts-design-construction-liability-waivers\/","name":"Construction Contract Design &amp; Construction Liability Waivers - Advise & Consult, Inc.","isPartOf":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/#website"},"datePublished":"2015-09-24T19:39:13+00:00","dateModified":"2015-09-24T19:43:31+00:00","description":"A construction contract is now more and more frequently being written to include liability waiver clauses.","inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/www.myconstructionexpert.com\/blog\/construction-contracts-design-construction-liability-waivers\/"]}]},{"@type":"WebSite","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#website","url":"https:\/\/www.myconstructionexpert.com\/blog\/","name":"Advise & Consult, Inc.","description":"Construction Expert Witnesses","publisher":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/#organization"},"potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/www.myconstructionexpert.com\/blog\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Organization","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#organization","name":"Advise & Consult","url":"https:\/\/www.myconstructionexpert.com\/blog\/","logo":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/logo\/image\/","url":"https:\/\/www.myconstructionexpert.com\/blog\/wp-content\/uploads\/2015\/11\/AC-Red-Logo.png","contentUrl":"https:\/\/www.myconstructionexpert.com\/blog\/wp-content\/uploads\/2015\/11\/AC-Red-Logo.png","width":162,"height":75,"caption":"Advise & Consult"},"image":{"@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/logo\/image\/"},"sameAs":["https:\/\/www.facebook.com\/Advise-Consult-Inc-126949043996790\/","https:\/\/x.com\/adviseconsult","https:\/\/www.linkedin.com\/company-beta\/204526\/","https:\/\/www.youtube.com\/user\/MrConstructionExpert"]},{"@type":"Person","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/0a11abe008083d5fb19c2b0feefe7bd7","name":"admin","image":{"@type":"ImageObject","inLanguage":"en-US","@id":"https:\/\/www.myconstructionexpert.com\/blog\/#\/schema\/person\/image\/","url":"https:\/\/secure.gravatar.com\/avatar\/b01e71b7acadd7657af782b7ad1a30cc?s=96&d=mm&r=pg","contentUrl":"https:\/\/secure.gravatar.com\/avatar\/b01e71b7acadd7657af782b7ad1a30cc?s=96&d=mm&r=pg","caption":"admin"},"sameAs":["http:\/\/www.expertwitnessinconstruction.com"]}]}},"jetpack_featured_media_url":"","jetpack_sharing_enabled":true,"jetpack_shortlink":"https:\/\/wp.me\/p2ztG6-3HNw","jetpack_likes_enabled":true,"_links":{"self":[{"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/posts\/883346","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/comments?post=883346"}],"version-history":[{"count":3,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/posts\/883346\/revisions"}],"predecessor-version":[{"id":883350,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/posts\/883346\/revisions\/883350"}],"wp:attachment":[{"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/media?parent=883346"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/categories?post=883346"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.myconstructionexpert.com\/blog\/wp-json\/wp\/v2\/tags?post=883346"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}