Sunday, April 19, 2009

Contract Clauses That Every Construction Contract Should Have-Concealed Conditions

Hidden defects can greatly increase the cost of the work and the time for completion. Contractors must protect themselves in the event of hidden defects. I worked on a case involving one of the largest construction companies in the world who sued the state of Missouri because a bridge they were building was signifcantly delayed by underwater conditions that were not detected when the original survey was made. The case was in the millions of dollars.

This Agreement is based solely on the observations Contractor was able to make with the structure in its current condition at the time this Agreement was signed. If additional concealed conditions are discovered once work has commenced that were not visible at the time this contract was signed, Contractor will stop work and point out these unforeseen concealed conditions to Owner(s) so that Owner(s) and Contractor can execute a Change Order for any Additional Work.

Here's another one:

CONCEALED CONDITIONS: This Agreement is based solely on the observations Contractor was able to make with the structure in its current condition at the time this Agreement was signed. If additional concealed conditions are discovered once work has commenced that were not visible at the time this contract was signed, Contractor will stop work and point out these unforeseen concealed conditions to Owner(s) so that Owner(s) and Contractor can execute a Change Order for any Additional Work. Owner(s) agrees to be available within a 24 hour period to respond to Change Order work. Should Owner(s) delay project more than 24 hours by not responding to the Change Order, Owner(s) will be responsible for any costs to the Contractor plus a 33.3% GPM.