Refining Contracts Part 3: Concealed or Unknown Conditions

Date Posted: August 5, 2015

Posted In: White Papers,

by Joseph C. Blanner, Esq., McCarthy, Leonard & Kaemmerer, LC

Encountering concealed or unknown site conditions can result in additional project costs.  To manage this risk, the contractor performing the work should make sure that his construction contract has a provision dealing with the discovery of concealed or unknown site conditions.

A contract provision can indicate that if conditions are discovered at the project site that are: (1) subsurface or otherwise concealed that differ materially from those described in the contract documents; or (2) are unknown physical conditions of an unusual nature, which differ materially from those ordinarily found to exist, then an equitable adjustment is to be made to the price for the work and/or the time to complete the work.

The contractor should remember that the contract exists to allocate duties between the parties and to manage each parties risk.  Including a provision dealing with concealed or unknown site conditions can reduce the risk to the contractor of incurring increased and unanticipated construction costs.  So, we would recommend reviewing your specific contract provisions relating to concealed or unknown conditions with your attorney.

Please let me know if you have any questions or comments concerning the foregoing.  I can be reached at jblanner@mlklaw.com.