Going green on your next construction project can prove to be both rewarding and beneficial in many ways. It can also, however, be uniquely problematic. There are several examples of potential risks and expenses that are particularly prevalent in green project cases. Contractors should always be aware of specific contract provisions that may result in broad and unexpected future liability.
Here are some ways to help avoid an uncomfortable and expensive situation later:
Define, Define, Define!
You may think that terms like “sustainability” or “green certification” are commonly understood but terms like these do not have any universal meanings. They can come with entirely different meanings depending on the sector, region and the particular client. Make sure to clearly define these terms. It may be helpful to incorporate “definitions page” in the beginning or end of contract to list all important defined terms.
Designate a responsible party for certification. Get a trustworthy green coordinator for your project. Designate someone who will be responsible for all parties, who can analyze the work to ensure compatibility with the rating system, and who can put together all the required paperwork for the project.
Create a responsibility matrix. Create a “matrix” (or even a table) of who will be responsible for specific tasks. This can help you avoid some messy finger-pointing when work doesn’t get done according to plan.
Be careful with certification. Certification may come 6-18 months after substantial completion of the project. In some cases, certification may not come at all. Thus, be cautious about tying certification with the substantial or final completion of the project. At the very least, make sure your contract sets up some payment timeframes and expectations.
Know Your Vendors and Products
Green project technologies can be new and complex. Investigate before signing up for or incorporating an unfamiliar technology or product. Make sure to manage the owner’s expectations during the process.
Beware of Damage Waivers
Beware of consequential or specific damage waivers. Damages for failure to certify or failure to meet certain benchmarks may be unclear and imprecise. Consider waiving such damages and clearly state specific expectations for the project.
Get Work to Flow Down
Try to make sure that obligations up the chain, go down the chain. Flow down provisions and clauses are typical in construction contracts therefore they should also be used in green contacts to spread liability.
Though going green can be the right choice for your next construction project, always stay informed about the risks and pitfalls you may face along the way. Being informed now can significantly curb your costs down the road. Here at Smiley Law, we always make sure our clients go in with eyes wide-open. Contact us today for all your green project needs.