Construction Contract Tips For Allocating COVID-19 Risks

In an article published in Law360, Jonathan Head discusses tips for owners and contractors to allocate risk in construction contracts through the uncertainty of COVID-19. 

While much media coverage has centered around the pandemic’s relation to force majeure clauses, many other fundamental contract issues, such as fixed price and schedule terms, have been often ignored. 

“There has been practically no mention of the prudential question of whether exercising a clear contract right makes sense when the countervailing facts of the pandemic are so compelling,” writes Head. 

The article goes into detail about strategic methods of using the claims that arise from COVID-19 for the greater benefit of both owners and contractors. 

“Contracts are for foreseeable circumstances and risks,” Head explains. “To the extent parties identified uncertain risks and assigned those risks plainly, then parties should live by them. But many contracts have enough play in the joints that enticing facts will get legal decision makers to grant relief from strict terms. Experienced construction law practitioners know many contractors have achieved relief with far less factually in their litigation quiver.” 

Head also provides practical advice for contractors to mitigate contractual risk amid the pandemic.

“Seek relief, but don't try to balance the books using this disruption,” Head advises. “There is little question that COVID-19 presents some form of changed condition for most construction projects.”

For the full article, you may click here.