Exculpatory Clauses in Construction Contracts: The Effect of the Use of Exculpatory Clauses On Contractors Bid Price

摘要

Exculpatory clauses are statutory clauses that shift potential risks from one party to another. The party assuming the liability of a risk is expected to have the necessary experience, knowledge and capability to manage and control that risk. Edward Fisk and Wayne Reynolds state that "the principal guideline in determining whether a risk should he transferred to another is whether the party assuming the risk has both the competence to assess the risk and me expertise necessary to control or minimize it" (p. 268) [2]. For example, in a design-bad-build project delivery method, the designers are expected to be liable for the drawings and specifications, while the contractor is responsible for the construction methods and means. Conversely, owners are responsible for making payments on time with no delays.