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Construction Contract Language; a Growing Impediment to Trust and Cooperation

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Conference

2014 ASEE Annual Conference & Exposition

Location

Indianapolis, Indiana

Publication Date

June 15, 2014

Start Date

June 15, 2014

End Date

June 18, 2014

ISSN

2153-5965

Conference Session

Construction Contracts, Law and Ethics

Tagged Division

Construction

Page Count

16

Page Numbers

24.316.1 - 24.316.16

DOI

10.18260/1-2--20207

Permanent URL

https://peer.asee.org/20207

Download Count

281

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Paper Authors

biography

Brian William Loss JD Purdue University, West Lafayette

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A 40 year construction industry veteran with a Juris Doctorate, Brian transitioned in 2010 to academia where he now focuses on photovoltaic research, project-based learning, and high-performance building techniques.

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Abstract

Construction Contract Language; a Growing Impediment to Trust and Cooperation Brian W. Loss J.D.Written documents that have come to be seen as standard agreements in the construction industry havebecome unnecessarily complicated and dominated by exculpatory and risk shifting clauses. As such, thesewritings often reflect a set of conditions, impossible for the layman to understand, that are imposed upon theweaker party by the stronger. This represents a disconnect in expectations between the two parties ratherthan a true meeting of the minds as required for actual contract formation. This type of writing tendered bythe stronger party, and usually accepted by the weaker, has been legitimized by custom and usage; it has beendone and so it becomes acceptable conduct. Consequently, aggressive contract language has becomeaccepted as common practice. This practice engenders an atmosphere of suspicion and distrust between thecontracting parties that is inconsistent with what has been the relational nature of the industry. This relationalcomponent of the construction industry has been its vitality valuing trust and cooperation over short termgain. It is after all the relational nature of the industry that facilitates cooperation in the decision makingprocess allowing contracting parties to deal with issues as they arise in a timely fashion thereby keeping costslower. The valuation of short term gain over mutually beneficial, long-term working relationships has beendetrimental to the industry driving up the cost of construction and driving many smaller but viable operationsfrom the field. This has had the effect of consolidating the industry around larger players who have theresources to retain legal counsel as a part of their overhead that is ultimately passed on to the customer.This article will examine contract language as it has evolved to establish purpose and its purported as opposedto its actual effect of that language. We will then document the trend in smaller operations, which lack theresources to retain counsel, leaving the industry and the deleterious anticompetitive effects of removing allbut the largest operations from the construction process. Finally, we will suggest common sense changes incontract language predicated upon trust and cooperation that will be beneficial to both parties and, by proxy,to those who are served by an industry animated by better purposes.

Loss, B. W. (2014, June), Construction Contract Language; a Growing Impediment to Trust and Cooperation Paper presented at 2014 ASEE Annual Conference & Exposition, Indianapolis, Indiana. 10.18260/1-2--20207

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