Equitable Risk Allocation: A Legal Perspective

The team also developed a table showing recommended contract language for the 14 “hot button” risks. For each risk, the tables provide examples or descriptions of contract language 1) favoring the buyer, 2) favoring the seller, or  3) compromise. The issues shown at the top of each table should be considered when negotiating clauses pertaining to these risks. The language presented in the contract language tables are recommended, and can be used a starting point or guidance in negotiating the language appropriate to risks considered important by one or both of the parties. (IR210-3, p. 10)

The Research provides legal perspectives and covers legal research on common law interpretations of 10 of the 14 “hot button” risks. For each of the 10 risks addressed by the research, the findings are described, along with a “Legal Issues and Considerations” flow chart. The flow charts are especially instructive on how courts may assign responsibility between owner and contractor. RR210-11 covers the legal perspectives in more details and includes detailed descriptions of relevant court decisions relating to the 10 risks.

IR210-3, Equitable Risk Allocation: A Legal Perspective

This is a companion publication to IR210-2, and should be used in conjunction with IR210-2. Significant contents include listing of “hot button risks” (risks most frequently allocated inaprropriately), list of general risk allocation principles and legal risk allocation principles, and a contract language table for each of the “hot button risks.” IR210-3 also includes a legal issues and considerations flow chart for each risk. These charts help minimize the confusion and ambiguities surrounding the allocation of each risk.