I often harp on the importance of having an experienced construction attorney review your construction contracts. A recent situation at Dartmouth College emphasized the importance of anticipating the unexpected when reviewing your construction contracts.
Dartmouth is building a new $200 million engineering school, with a 340 vehicle underground parking garage. The first step was to dig a 70-foot-deep hole for the 160,000 square foot building. The problem is that the hole is 10 feet farther south than it should be.
Work has come to a halt and a spokesperson for Dartmouth said
We are in the process of investigating how the error occurred. We have assembled a core group of internal and external representatives with design, project management and legal expertise and will know more in the coming weeks
Yes, legal is involved to review the construction contract to determine everyone’s rights under the contract.
This project, and all of your projects, should raise a few questions in your mind.
- Who is going to have to pay for this mistake?
- Who was responsible for staking out the location of the building?
- Did the owner consent to the hole location by not objecting when digging started?
- Does the general contractor have to pay for the damage?
- Is there a limit to those damages?
- Can the general contractor look to the subcontractor for indemnity?
- Are there flow-down clauses that allow the subcontractor to look to the sub-subcontractor for indemnity?
- How does insurance factor into to all of this?
Construction contracts are a minefield for the unwary. Make sure you discuss your construction projects with an experienced construction attorney and have them help draft or at least review your construction contracts.