In a favorable decision issued March 11, the TN Court of Appeals agreed with AGC of America and AGC of Tennessee that a subcontractor cannot sue a general contractor on one and the same set of facts for not only breach of contract (seeking to recover its purely economic losses) but also in tort for misrepresentation (seeking compensatory and punitive damages). The court of appeals ruled that the subcontractor’s ability to recover monetary damages was limited by its contract with the general contractor. As such, the court vacated the lower court’s award of punitive damages because they were not permitted under the contract.

ConsensusDocs recently presented a webinar entitled “Contract Killer Clauses and How to Negotiate Out of the Them.” Rather than the party that is in the best position to manage and mitigate risk, construction contracts often shove risk down the throat of the weakest party in the contractual negotiation chain. This is not effective risk management. Studies indicate that contract amount may increase up to 20% to account for just the top five most abused construction contract provisions.

Good legal writing is simply good writing. Construction contracts written in legalese confuse rather than clarify performance expectations. “Gotcha clauses” buried in a contract leads parties to distrust one another. ConsensusDocs standard construction agreements are written in clear and concise language. This helps the parties understand, administer, and interpret the contract. One distinguishing feature in ConsensusDocs is the integration of the general terms and conditions into the agreement. This allows parties to complete an agreement with one document instead of two, which has many benefits.

While traditional contracting or design-bid-build is still the most prevalent project delivery method in the United States construction market, the design-build project delivery method has risen in usage significantly over the past 20 years to become a well-established contracting vehicle by private and public owners alike for all types and sizes of construction projects. The ConsensusDocs design-build standard contract documents are some of the most used in the United States. A comparison of the ConsensusDocs design-build contracts as compared to the American Institute of Architects (AIA) and Design-Build Institute of America (DBIA) can be found here.

At the recent AGC conference, one of the concerns that stood out is the design liability faced by construction companies. It is one of the most important risk management issues faced by general contractors today. Design liability concerns are not limited to just design-build projects. It is a hot-button issue for builders because the line between an architect’s responsibility to create sufficient design documents and a builder’s responsibility to execute the means, methods, and techniques is increasingly blurry. Problems arise when owners, design professionals, and builders point fingers, rather than truly collaborate, and communicate. While construction technologies used to assemble complex systems within buildings are increasingly sophisticated, such sophistication is unfortunately not matched with increased information sharing and effective communication.

ConsensusDocs recently presented a webinar entitled “Managing Subcontractor Default, Bankruptcy, and Owner Insolvency in a Recovering Post Covid-19 Construction Economy.” The webinar, moderated by Phil Beck, a partner in the law firm Smith, Currie, and Hancock LLP, highlighted several steps that construction professionals can proactively take to protect themselves and their projects’ success.

Staying abreast of the latest developments and trends in construction law is one of the best ways to mitigate your construction company’s risk. Knowledge at your fingertips is power. ConsensusDocs publishes a monthly construction law newsletter that is one of the best resources to stay on top of your game. Sign up for free here.

ConsensusDocs recently posted a free webinar on Construction Price Escalation that helps owners, general contractors, and trade contractors alike navigate the unprecedented price spikes and supply chain disruptions wreaking havoc on the industry. You can access the webinar here, as well as other valuable resources available on the ConsensusDocs Price Escalation Resource Center that includes links to sample language provided in the ConsensusDocs 200.1 Price Escalation Amendment.

That is enforceable under State Construction Laws