Understand the Changing Interpretation of Risk Allocation under the Differing Site Conditions Clause
Differing Site Condition Claims – Is the Risk Still the Same?
Live On : Thu, March 29, 2018 | 1:00 pm ET – 12:00 pm CT | Duration: 90 Minutes
Presented By : James G. Zack Jr. | Certificate of Training
The differing site conditions clause is one of the oldest clauses used in construction contracts, having been created by the U.S. Federal government in 1926. It is generally accepted that the object of the clause is to transfer the risk of latent site conditions to the owner, thus, enticing contractors to reduce their contingency cost at the time of bid. The promise of the clause is that if the contractor encounters a “materially different” condition during the execution of the work, the owner will compensate the contractor for the resulting cost and/or time. For more than 90 years, this standard clause has been used widely in both public and private contracts.
Most practitioners in the construction industry think they know what the clause means and how it operates. However, in the words of one of the mid-20th century “deans” of construction law, Max E. Greenberg, “It ain’t necessarily so!” Over the years, the Courts and Boards of Contract Appeals have been slowing changing the interpretation of risk allocation under the clause. A series of Court and Board cases have increased the contractor’s risk concerning differing site conditions.
Join this session, where expert speaker James G. Zack Jr., CCM, CFCC, FAACE, FRICS, FFA, PMP will discuss the differing site conditions clause and explore the changes in risk allocation. James will discuss how the typical understanding of this 90-year-old clause is being modified in Court and Board decisions.
Whether you are an owner, a contractor, or a construction manager, you will gain an understanding of the intent and operation of the typical differing site conditions clause used in most contracts. With this understanding, you will understand your risk concerning differing site conditions.
This session will help you understand:
- The differing site conditions clause and how it operates
- The conditions that are and are not covered by the differing site conditions clause
- What must be proven to prevail on a differing site condition claim and what contractual requirements must be complied with in full
- Several Court and Board of Contract Appeal decisions that are changing the “traditional” risk allocation under the differing site conditions clause
This session will cover:
- The definition of a differing site condition and why there is a need for a differing site conditions clause in a construction contract
- The history and purpose of the clause, and the modern differing site conditions clauses
- The terms “indications” and “material difference”
- The impact of contract disclaimers related to differing site conditions
- The conditions that are generally not covered by the clause and conditions that are sometimes included within the scope of the clause
- The six-part test for a successful differing site condition claim and five additional contractual requirements contractors must comply with in order to prevail
- The contractor’s duty to continue work
- The “reverse differing site condition claim” – an owner claim that may be asserted against the contractor seeking recovery of funds from the contractor when they encounter conditions “materially better than anticipated”
- A number of Court and Board of Contract Appeal decisions that appear to be slowly eroding the traditional risk allocation commonly accepted under the differing site conditions clause, along with lessons learned from each case
- A list of practical recommendations for both owners and contractors dealing with the risks of differing site conditions
Ask a question at the Q&A session following the live event and get advice unique to your situation, directly from our expert speaker.
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