Disclaimer in Construction Contract
When it comes to construction contracts, having a disclaimer included is essential. It`s a clause that serves as a protection against any liabilities or damages that may arise during the course of the project. In this article, we`ll discuss everything you need to know about the disclaimer in a construction contract.
What is a Disclaimer?
A disclaimer is a statement that limits a party`s liability in a contract. In a construction contract, this statement is used to protect the contractor or construction company against any claims that may arise from the client.
Why is a Disclaimer Necessary in a Construction Contract?
A disclaimer in a construction contract is necessary to protect the contractor or construction company against any unforeseen circumstances that may arise. For instance, if there`s a delay in the project`s completion due to unforeseen circumstances such as natural disasters, it may not be the contractor`s fault. In such a case, the disclaimer clause serves the purpose of limiting the liability of the contractor.
What Should a Disclaimer Include?
A disclaimer in a construction contract should include the following:
1. Scope of the disclaimer: The disclaimer should specify what areas it covers and what liabilities it limits.
2. Exceptions: It should also clarify what exceptions it doesn`t cover.
3. Consequential damages: The disclaimer should include provisions for consequential damages, which include loss of profits, revenue, and other damages arising from the breach of the contract.
4. Indemnity: The disclaimer should also specify indemnity provisions, which require one party to reimburse the other for any damages arising from a third party`s claim.
5. Governing law: It should also specify the governing law that applies to the contract.
What are the Disadvantages of a Disclaimer in a Construction Contract?
A construction contract disclaimer can limit a client`s rights and protections. The client may end up paying for the damages arising from the contractor`s negligence or failure to adhere to the terms of the contract. Additionally, a disclaimer in a construction contract may discourage a client from raising any issues during the project`s execution.
Conclusion
A disclaimer in a construction contract is essential for both parties` protection. It limits the contractor`s liability and also protects the client from any unforeseen damages. However, it`s crucial to ensure that the disclaimer outlines all the necessary provisions and exceptions to avoid disputes during and after the project`s execution.
