What Is Your Approach to Negotiating Design and Construction Contracts?

What Is Your Approach to Negotiating Design and Construction Contracts?

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Publish Date:
5 March, 2024
Category:
Contractor Projects
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The way I negotiate Design and Construction contracts is really project-specific and client-specific And there are some instances where it is appropriate for me to negotiate a contract that is one-sided in my client's favor But all things being equal I typically prefer to see fair and commercially reasonable Design and Construction contracts where the risks and responsibilities are not just pushed away but rather allocated to the party that is best able to manage that risk It is not because I am a good guy, or altruistic It is because in my experience projects tend to be most successful where there is a reasonable alignment of interest between the parties who are involved I don't try to "win" a contract negotiation so much as arrive at a smart Design or Construction contract So for example an Owner does not necessarily "win" a negotiation if it imposes such onerous terms on the General Contractor that it has no choice but to find fault with the design out of the gate, and to try to seek change orders for additional money in order to make a reasonable profit The owner has not "won" that negotiation so much as they set itself up for claims and strife Similarly, Illinois law imposes important restrictions on how far an Indemnity Clause can go So if an Owner imposes such an onerous Indemnity Clause on its Contractor that a court won't enforce it the Owner has not "won" the negotiation so much as missed an opportunity to negotiate an enforceable Indemnity Clause that may be of great value to them Similarly, sometimes Owners will push Architects and Engineers to accept such onerous contract terms that it takes them outside the protection of their Professional Liability Insurance And this is not good for anyone involved That PL insurance is important protection for Architects and Engineers...but that PL insurance also protects Owners as well And when Owners negotiate their contracts to put themselves outside the protection of PL insurance they do not "win" the negotiation so much as do themselves a disservice These are complicated issues but a Construction Attorney can help you navigate them