Your project is behind schedule, over budget, does not meet the owner’s expectations, or some combination of the above. More often the owner and contactor resolve their differences, but sometimes they do not and the contractor is terminated. Most contracts contain specific procedures for declarations of default by either party, but since construction contracts typically require the contractor to continue work during the pendency of disputes, most contract terminations are owner declared.
Once the owner declares a contractor in default of a construction contract and the contractor denies fault, litigation is nearly certain. This is universally true despite the wide array of possible responses, actions, and events following a declaration of default, and almost without regard for the size of the project. Whether the litigation is brought by the Owner, the Contractor, a sub-contractor, or a completing surety, the aggrieved party often includes the design professional on its list of pockets to raid. This article will examine why the architect is named as a defendant in these suits and identify some of the common theories of liability advanced by different construction-project participants. Finally, the paper will discuss practices that the architect can incorporate in its contracts and day-to-day business operations to lessen, and possibly avoid, litigation altogether.