differing site condition; risk-shifting clause; ABA Construction Contracts Book; Type I and Type II


I recently attended an ABA conference in Newark, New Jersey in which the theme was “Finding Common Ground in Drafting and Negotiating Design Clauses” in construction contracts.  One of the speakers presented a segment regarding differing site conditions in which he articulated the major risks that differing site conditions present to both owners and contractors and the potential impact of an “unfavorable” drafting of this clause.  His presentation laid the “groundwork” (pun intended) for the challenges of owners and contractors in finding “common ground” (yep, another bad play on words) in the site conditions contract clause.

On the one hand, the owner’s goal is to ensure that the design and the construction means and methods are compatible with the site conditions and that the site-related costs are captured in the project’s budget.  The Contractor’s goal is to ensure that its bid either incorporates a contingency to cover the risk of an unforeseen site condition or has assurances that the contract provides a mechanism to allow for reimbursement for the work.
Continue Reading Finding “Common Ground” in a Site Conditions Clause