Designers, Builders, Pushing To Limit Liability

“Owners are optimists and contractors are negotiators,” writes Stoel Rives attorney Eric A. Grasberger, as he takes note of what he calls a disturbing trend (for owners): the imposition of liability waivers in construction and design contracts. Often they are hidden or tacked on to the end of lengthy proposals, he says. One type of waiver, the consequential damages waiver, is sometimes sold as the industry standard, which is a stretch and can be costly to the owner. Consequential damages include revenue lost when a project is not completed, and that can be more than the cost of repairing construction defects. Allowing this particular waiver, Grasberger writes, is “uniquely unsavvy” because it’s likely covered by the vendor’s liability insurance, which in a sense the upstream customer has already paid for. But another kind of waiver can prove even more costly, one that may appear in the contract as something abbreviated, some will say appropriately, as “the LOL clause.”