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ConstructionPro Week, Volume: 5 - Issue: 12 - 03/25/2016

What Does Negligence Have to Do with Construction Contracts?

One of the fundamental purposes of a construction contract is to allocate risk and define the respective responsibilities of the parties. What, then, do theories of negligence or tort law have to do with the performance of a construction contract? The answer is: virtually nothing.

 

Project owners sometimes argue that a construction contractor or the contractor’s principals were negligent in the performance of the construction work. This argument may result from the owner’s failure to protect or preserve its rights under the contract. Or, the owner may simply have no reasonable claim under the contract. Sometimes the project owner is trying to reach individual owners or officers of the corporate contractor who are not parties to the construction contract.

 

These efforts are almost always futile. In a recent North Carolina case, the court explained that when the terms of the economic relationship between project owner and contractor are fully defined in the construction contract, there can be no recovery for economic losses caused by negligent performance of the work. The terms of the contract, not tort law, govern.

 

Have you encountered situations where, instead of talking about the requirements of the construction contract, people want to complain of “negligent” performance of the construction work? As always, your comments are welcomed.

 

COMMENTS

I've had it come up often, usually when an owner is trying to trigger a contractor's insurance coverage for damage to "other work."
Posted by: Michael James - Friday, March 25, 2016 1:47 PM










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