Concealed or Unknown Site Conditions
(Fixed-Price Construction Contract)

Summary

This concealed or unknown site conditions clause may be included in a fixed-price construction contract to address the responsibilities associated with the discovery of unanticipated site conditions during the progress of a construction project, also commonly known as differing site conditions or changed conditions. This clause contains practical guidance and drafting notes. A site conditions clause usually requires the contractor to inspect and understand the grade level and above-ground job site conditions prior to the start of any construction activities. However, it can have the potential to be an expensive risk transfer clause for the contractor in a fixed-price contract. A soils investigation, which is typically performed by a specialized geotechnical company is often used to identify subsurface conditions (i.e., rock, high water levels, buried toxic waste, soft organic clay-like materials unsuitable for foundations, cavities such as limestone caves, old tunnels, etc.) that when left undiscovered can create problems for contractors. Capitalized terms used in this clause should be conformed to those used in the relevant contract. For a full listing of key content covering construction, see Construction Resource Kit. For further guidance see Owner-Contractor Agreements . For a discussion of the permissible scope of indemnification in construction contracts, see Permissible Scope of Indemnification in Construction Contracts State Law Survey. For a comprehensive analysis of potential strategies for approaching zoning contingencies, see Zoning Contingencies in Construction Contracts. For guidance on drafting a force majeure clause in a construction contract, see Force Majeure Clauses in Construction Contracts. For a list of key resources covering construction-related tasks for a first-year associate, see First Year Associate Resource Kit: Construction. For a list of key resources covering construction-related tasks for a junior associate, see Junior Associate Resource Kit: Construction. For a discussion of issues and tasks commonly encountered by in-house lawyers and counsel working on construction-related matters, see In-House Construction Resource Kit. For a list of key resources covering construction-related tasks for a summer associate, see Summer Associate Resource Kit: Construction. For a list of key resources covering construction-related tasks for a federal government summer intern, see Federal Government Summer Intern Resource Kit: Construction. For related treatises, see 3 Construction Law P 10.04 (Contractor’s Liability For Injuries to Workers Employed by Other Contractor), 2 Construction Law P 5B.02 (Contractor's Duties to Third Parties), 2 Construction Law P 5B.01 (Contractor's Duties to Owner), and 2 Construction Law P 5B.03 (Construction Manager's Duties).