ABSTRACT
When drafting a construction contract, it is important to consider two issues: coordination with the design agreement and risk allocation. This chapter identifies a number of specific issues in drafting the construction contract that can significantly impact the successful completion of the project, and suggests possible wording to address these issues. The construction manager (CM) at risk delivery is gaining popularity among public and private owners. The chapter discusses certain contractual provisions unique to the CM at risk delivery method. When drafting a construction contract, the owner should carefully consider the issue of risk allocation. Risk allocation refers to which party bears the responsibility for the costs associated with building the project. It is important to explicitly establish the contractor's responsibility for the acts and omissions (i.e., the mistakes) of its subcontractors. That responsibility is a significant component of the value that the contractor provides. This provision should explicitly assign the risk of subcontractor mistakes to the contractor.
