Limiting Your
Liability
by Jeffrey G. Gilmore and Al B. Hill
When today's builder enters into a
construction contract, his potential
liability is much greater than in past
years. Whether the liability is
grounded in tort or in contract law,
the modern-day explosion of
litigation has led to greater and more
frequent jury awards. This increased
exposure to law suits has led to
higher insurance rates for the
contractor and higher construction
costs in general.
In an attempt to remain
competitive without taking undue
risks, many businesses have adopted
measures to reduce their liability. A
primary tool for this purpose is the
limitation-of-liability contract clause.
In the construction industry, with
most materials suppliers and A/Es
using limitation-of-liability clauses,
the brunt of the liability falls