{"id":899768,"date":"2022-03-30T15:03:43","date_gmt":"2022-03-30T21:03:43","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=899768"},"modified":"2022-03-30T15:03:45","modified_gmt":"2022-03-30T21:03:45","slug":"construction-contract-ongoing-impact-of-covid-19","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/construction-contract-ongoing-impact-of-covid-19\/","title":{"rendered":"Is Your Contract Ready for the Ongoing Impact of COVID?"},"content":{"rendered":"\n

Aaron Brotman | Cole Schotz<\/a><\/p>\n\n\n\n

The COVID-19 pandemic has lasted two years, and while offices, projects, and the rest of life begin to return to pre-pandemic normal, the construction material supply chain and costs have not. In fact, it appears as though the impact on projects of material costs and delivery difficulties will be an issue going forward for the foreseeable future.<\/p>\n\n\n\n

But do you know what will happen on your project if and when material prices increase? How are material delays dealt with? Even if these issues are specifically identified and accommodated for in the contract, the question remains to whether the contract is fair and reasonable or not \u2013a reasonable contract<\/a> will lead to a better project without delays, disruptions, and unwanted claims.<\/p>\n\n\n\n

The standard form AIA contracts, which many in the construction industry use without second thought, fail to clearly and sufficiently account for these variables. For both price escalation and supply chain concerns, there is not a one-size-fits-all solution.<\/p>\n\n\n\n

A good rule of thumb for allocating controllable risks is that the party that is in the best place to adjust and account for it should be the one to bear that risk. However, when dealing with supply chain disruptions and material price escalations, neither party is truly in a position to account for all of that risk. Therefore, the parties will need to determine before the project starts who can bear what risk, who can account for that risk, and what should the limit of that risk be.<\/p>\n\n\n\n

When entering a construction contract now with a time horizon of more than a few months, and particularly one with long-lead deliverable materials, the parties need to ask themselves a number of questions, including:<\/p>\n\n\n\n