Risky Business: Construction Contracts and Losses Caused by COVID-19
Even before the Coronavirus/COVID-19 pandemic, construction projects involved significant risks for owners, contractors, subcontractors, and suppliers. Untold changes in circumstances related to the prices and availability of labor and materials, hidden conditions, and acts or events within or outside the parties’ control have the potential to turn a lucrative project into one that leads to ruin. Accordingly, one of the primary functions of construction contracts is to allocate these risks so it is clear who will pay for increased costs if something unexpected happens.
Now that we are in the midst of the pandemic and all of the disruptions that come with it, parties to a construction contract should review the terms of their agreements to determine who assumed the risks. Here are a few key clauses to look for:
- Force Majeure
Parties negotiating the details of a construction contract should also consider how they want to structure these risks in light of the ever-changing circumstances we now live with for the duration of the Coronavirus/COVID-19 pandemic.
The Construction Attorneys at Mesch Clark Rothschild are here to assist owners, contractors, sub-contractors, and suppliers with liens, contract disputes, and related issues at every stage from contract negotiation through litigation. We are also seasoned mediators and arbiters. Call our office in Tucson at (520) 624-8886.