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Course Details

Course Information
  • smart_display Format

    On-Demand

  • signal_cellular_alt Difficulty Level

    Intermediate

  • work Practice Area

    Real Property - Transactions

Date & Time
  • event Date

    Tuesday, May 14, 2024

  • schedule Time

    1:00 p.m. ET./10:00 a.m. PT

  • timer Program Length

    90 minutes

Credit Information

  • This 90-minute webinar is eligible in most states for 1.5 CLE credits.

$297.00
CLE
ALL

This CLE webinar will discuss consequential damages arising from design and construction work and contractual waivers of consequential damages. The panel will take a deeper dive and discuss the pros and cons of such waivers, jurisdictional differences in interpretation, and best practices for drafting the waivers, including potential carveouts.

Faculty

Jason L. Richey
Partner
K&L Gates, LLP

Mr. Richey’s practice is concentrated in the areas of dispute resolution with an emphasis on the construction and engineering industry, complex commercial disputes, energy disputes, and state and local bid protests. For almost a quarter century, he has focused his energy on winning litigations, arbitrations, and mediations for his clients. During this time, he has worked on local engagements as well as matters in over 35 different states, Asia, Africa, Europe, Australia, and South America representing companies both large and small. The firm has recently engaged Mr. Richey to lead the Construction Practice Group in the Americas.

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Christina K. Brunka
Counsel
Venable LLP

Ms. Brunka represents entities and individuals in construction-related matters. Her focus is contract development, drafting, and negotiation, and resolving disputes before pursuing litigation or arbitration. Ms. Brunka’s background in architecture and structural engineering trained her to bring a methodical, yet creative and flexible, approach to problem solving. She also has experience with mechanic's liens, drafting and negotiating access agreements, and litigating construction disputes. Ms. Brunka previously worked in-house for a prominent university, focusing on construction law.

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Patrick J. Thornton
Member
Lewis Rice, LLC

Mr. Thornton practices primarily in the area of construction law. He represents all types of entities in the construction industry, including owners, contractors, subcontractors, suppliers, design professionals, and others. Mr. Thornton represents clients both large and small—private companies, municipalities, homeowners associations, small businesses, and individuals. His practice includes both transactional and dispute resolution matters. At the beginning stages of the construction process, Mr. Thornton assists in the drafting, negotiation, and review of construction contracts. During construction, he provides ongoing advice as to parties’ rights and responsibilities. When disputes arise, Mr. Thornton prosecutes and defends claims, including claims brought through litigation and arbitration. 

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Description

Consequential damages relate to indirect losses that arise from breach of contract by either party such as lost profits, damaged reputation, loss of business opportunities, and loss of use. Mutual waivers of consequential damages (mutual waivers) are regularly included in design and construction contracts, including form contracts such as in certain AIA documents because they limit the uncertainty of claims and the potentially excessive cost of potential damages.

However, these waivers can be problematic on a number of levels. A blanket waiver may deprive a party of a remedy for certain financial losses suffered. For example, a project delay could cause the owner to lose sales or rental income. It may also impede a party's ability to be indemnified for third-party claims.

Additionally, jurisdictions differ on what may constitute consequential damages so that the court's interpretation of the provision may result in the parties being liable for damages they meant to waive. And other contract terms can cause problems where they contradict what is in the waiver provision.

Therefore, counsel should understand under what circumstances mutual waivers should be used, how to draft the waivers clearly to reflect the parties' intent, how to ensure that the waiver does not conflict with other contract provisions, and how to use other provisions to mitigate risks for both parties (e.g. liquidated damages provisions) when including a mutual waiver in the contract.

Listen as our panel of experts discusses the risks and benefits of including mutual waivers of consequential damages in construction contracts and offers best practices for negotiation and drafting.

Outline

  1. Introduction
  2. Mutual waiver of consequential damages
    1. Risks
    2. Benefits
    3. Jurisdictional considerations
    4. Interaction with other provisions
    5. Provisions to mitigate risks for both parties
  3. Negotiating and drafting considerations
  4. Practitioner takeaways

Benefits

The panel will review these and other important considerations:

  • What are examples of jurisdictional variations on what constitutes consequential damages? What effect should these have on drafting?
  • How may counsel use other provisions in the agreement to mitigate risk for their clients when including a mutual waiver in the contract?
  • How can other terms in the agreement impact the mutual waiver provision? And what are best drafting practices to ensure other terms do not contradict or negate the parties' intent?