Negotiating Consequential Damages Waivers
By Charles Sink and David Ismay
The “waiver of consequential damages” provision became a part of the American Institute of Architects revised standard form construction documents in 1997, and has been retained, largely unchanged, in the AIA’s 2007 documents.1 These contracts are more widely used and copied, generally, than any other construction industry agreements. And because they provide for mediation and arbitration, consequential damages waivers in the construction context are more likely to be interpreted by the participants in mediation or by arbitrators, rather than by the courts.
This chapter offers practical advice about these waivers and suggests how they can be tailored to the particular transaction.