When one party breaches a construction contract, the primary
form of relief available is monetary damages. There are two general
types of damages - 'direct or general' damages and
'indirect or consequential' damages. A commonly
utilized component of many owner-contractor contracts is the
American Institute of Architects (AIA) A201 General Conditions
form, which includes a mutual waiver of consequential damages. Tim
Bench, an attorney at Rumberger, Kirk & Caldwell, points out
some of the dangers of incorporating this standard waiver in
contracts.
Related Questions
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What does the AIA standard mutual waiver of
consequential damages provide?
The waiver, included in the latest edition of the AIA's Form A201 General Conditions
for construction contracts, is meant to limit the parties'
liability to one another to direct damages. Limiting or eliminating
the availability of consequential damages reduces the monetary
incentives to escalate a claim and eliminates
