Shifting Sands: Negotiating Risk For Ground Conditions

Analysis

To minimise the risk of hotly contested and expensive disputes arising from subsurface conditions, parties entering into construction contracts should review and consider how that risk is allocated and if that allocation is appropriate before the contract is tendered or signed.

This is particularly so in the Middle East, where the civil codes of many countries in the region typically provide for the joint and several liability of the architect and contractor in respect of a total or partial collapse of a building or fixed works, for a period of ten years, even if the collapse is due to a defect in the land itself.  

The risk

Many projects are designed and contracted without adequate site and subsoil or seabed investigations. While this may be suitable for some types of contract it is not suitable for all, as without being aware of all the potential risks no proper pricing of the work or final design is possible.

As an owner, if the contract is a construct only, you would want complete investigation to reduce the risk of time and cost blow outs.