Volume 6 - Number 29 | July 21, 2008 - Construction Claims Advisor

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You are here: Home » Volume 6 - Number 29 | July 21, 2008

Volume 6 - Number 29 | July 21, 2008

EDITOR'S NOTES | Issue 6-29: Limitation of liability clauses in engineering services agreements have been controversial. The clauses typically limit the engineer's liability exposure to a refund of the fee the engineer received from the project owner. Engineers argue that this is an appropriate allocation of business risk, commensurate with the engineer's limited participation and small portion of the total project cost. Some owners feel these clauses give engineers a virtual license to commit malpractice. The Georgia Supreme Court recently refused to enforce one of these limitation clauses.

In another case, the Armed Services Board ruled that a slab of concrete was so hard that demolition contractors could not have been expected to anticipate the degree of difficulty encountered in breaking it out. This was a classic "Type 2" differing site condition.

And a New Jersey court refused to allow an equipment supplier to challenge an allegedly restrictive specification requiring the use of a particular proprietary product. The supplier was not a bidder on the prime contract and therefore lacked standing to challenge the spec.

ENGINEER’S LIMITATION OF LIABILITY VOIDED BY GEORGIA HIGH COURT: The Georgia Supreme Court reverses two lower court decisions that limited an engineer’s professional liability to the total fees paid out on the contract.

EXTREME NATURE OF MATERIAL WAS DIFFERING SITE CONDITION: An unyielding expanse of concrete slated for demolition meets the criteria for a differing site condition, says the ASBCA.

SUPPLIER NOT ALLOWED TO CHALLENGE RESTRICTIVE SPECIFICATION: A disinvolved party to a public bid invitation cannot challenge the specifications of the bid, rules a New Jersey court, unless it is a tax payer in that jurisdiction.