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What Is A Differing Site Condition?

ConstructionLawContract

Let’s say that you have drawn up all the construction contracts, and you are ready to start the job. However, once you are at the job site, a surprise awaits you: the condition of the property, or the physical layout of the property, is not what you thought or what was told to you or what was promised. Many of the contractual provisions you have agreed to, now are inapplicable or at least, not practical. What can you do?

Differing Site Condition Clauses

Construction contracts should have provisions for what are known as differing site conditions. The contract should provide additional time or expenses, in the event that a differing site condition is encountered.

The contract should have notice provisions in it, when a differing site condition is encountered, and the owner should have its own opportunity to inspect the property to verify the problem.

If there is no such condition in the contract, many courts will place the burden on the contractor—that is, if a differing site condition is discovered, and there is no clause in the contract, the contractor will have to bear the cost of whatever is needed to get the job done, despite the newly discovered and unexpected conditions.

From an owner’s standpoint, they can often get better price rates and costs, if they agree to a differing site condition that provides some protections to the contractor.

Types of Differing Site Conditions

What is a differing site condition? There are actually two different kinds of conditions.

The first are latent, or unknown, conditions. These are things that you could not have known, and that the owner could not have known existed. They may also be conditions that exist, that were omitted, or misrepresented, in plans or schematics that were given to the builder, which the builder relied upon.

The other kind of condition is when the ground or site is different from what would ordinarily be anticipated to be encountered in a given area, or on a given site. The problems encountered are simply not inherent in a job of that nature, or in that particular location. For example, water under the ground is discovered in an area where it would not be expected to be located.

Here, there were reasonable assumptions made about the condition of the property, which turned out to be incorrect.

Note that none of these excuse the builder or contractor’s obligation to conduct due diligence; that is, to do an inspection to determine the condition of the site.

If there were assumptions that were relied upon about the condition of the surface, the contractor may have to show that the reliance was reasonable, and that it was one that a prudent builder would have made. The conditions must truly have been unforeseeable at the time of contracting.

Our Fort Lauderdale construction law attorneys at Sweeney Law P.A. at 954 440-3993 can help review your construction contracts and agreements.

Resource:

acquisition.gov/far/52.236-2#:~:text=(2)%20Unknown%20physical%20conditions%20at,provided%20for%20in%20the%20contract

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