Liquidated damages are a fact of life in modern construction contracting. However, even if your contract contains a liquidated damages provision and the owner has assessed liquidated damages, that does not mean the assessment is valid or enforceable.

Owners routinely insert disclaimers and limitations of liability clauses in contracts that may limit or bar a contractor or subcontractor’s ability to collect additional compensation for work performed because of unexpected conditions and delay.

Generally, on construction projects, contractors provide an owner with a workmanship warranty. In addition, a contractor may supply the owner with manufacturer or material warranties after a project is completed. 

Generally, on construction projects, contractors provide an owner with a workmanship warranty. In addition, a contractor may supply the owner with manufacturer or material warranties after a project is completed. Although these types of warranties are provided by the contractor to the owner, the owner also provides certain warranties to the contractor during the course of construction.

The most prevalent form contracts used in the construction industry are generated by the American Institute of Architects (AIA). In November 2007, AIA made several significant changes to the key AIA documents used by owners, contractors, subcontractors and design professionals.

With increasing regularity, construction contracts are providing for the resolution of disputes through arbitration, rather than litigation through the court system. For example, the American Institute of Architects (AIA) 1987 and 1997 contracts contain a provision which requires arbitration through the American Arbitration Association (AAA).