Report

Risk Allocation in Construction Contracts

 
The allocation of risk is a factor that should be included in bidding and pricing of any construction contract. For example, a subcontractor may agree to perform the excavation work in accordance with the plans for a fixed price. Unless otherwise provided in the subcontract agreement, the excavator assumes all risks associated with completing the contract, such as unknown and unforeseeable subsurface conditions. However, the contract can allocate the risk between the contractor and subcontractor by excusing performance by the subcontractor or adjusting the contract price in the event of unforeseeable subsurface conditions.
This material will address various contractual issues and provisions that allocate risk between the parties to a construction project.

Faculty

John A. Snow

John A. Snow

Parsons Behle & Latimer