Construction contracts sometimes include directives, instructions or limitations on how the contractor must accomplish the work. This gives the project owner more control. But it also can create liability if these directives are interpreted to extend an implied warranty to the contractor. A recent case from the federal Armed Services Board is an example.
The Corps of Engineers designated certain haul routes to a job site. A drawing note said the site “shall be accessed only” by those routes. The contractor priced its bid on the assumption it could use those haul routes. After contract award, local authorities enacted an emergency ordinance which effectively blocked the use of a key route. This increased the contractor’s haul costs.
The contractor claimed this was a breach of an implied warranty and a change in the work. The government relied on the boilerplate Permits and Responsibilities clause. The contractor had agreed to abide by all applicable federal, state and local laws or ordinances. The contractor won this argument.
What's your opinion? Should project owners refrain from directives of this nature? Or should they attempt to have it both ways, including the directive and disclaiming any warranty?
To what extent should contractors rely on these directives when pricing the work? I welcome your comments below.
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