In a recent article published by Construction Business Owner that is the second part in a two-part series, construction law attorney J. David Arkell continues his discussion on how recognition and allocation of risk should be major concerns for all parties involved in a construction project and outlines additional significant risk-allocated clauses and their importance to the parties.
“Liquidated damages clauses typically establish a sum certain per day to determine damages the developer will suffer if the contract is not completed on time,” Arkell explains. “It is critical for contractors to understand that to hold a contractor liable for liquidated damages, the developer must still prove that the contractor caused or was otherwise responsible for the delay.”
He further discusses changes clauses, termination, no-damages-for-delay clauses as well as written notices.
“The contractor should review a proposed notice clause carefully, looking for red-flag language stipulating that strict compliance is necessary; that failure to comply strictly will be deemed a waiver of the contractor’s claim; and that the concepts of actual or constructive notice, lack of prejudice and other similar conditions will not excuse the contractor’s failure to comply,” emphasizes Arkell.
Read the full article in Construction Business Owner.
Read Part One: The Lowdown of Significant Risk-Allocation Clauses