(160b) Contract Disputes: Engineering Pitfalls Buried within Contract Language

Contracts are a critically important aspect in the world of engineering. Contracts establish an agreement between entities with obligations and responsibilities that are enforceable by law. Contract disputes can manifest for a multitude of reasons. In his book, Understanding and Negotiating EPC Contracts, Volume 1: The Project Sponsor’s Perspective, Howard Steinberg identifies four contractual drafting deficiencies that can lead to disputes: 1. Vague or ambiguous provision language; 2. Provisions that highlight a potential issue but fail to provide a resolution pathway; 3. Unfair or unenforceable provisions; and 4. Issues for which there are no applicable provisions or language in the contract. Many of these “deficiencies” may be further exacerbated because engineering concepts may be complicated and difficult to translate into clearly written and interpreted contract provisions. Additionally, a complicated dispute related issue may not be contemplated or anticipated at the time when the contract is drafted.

This presentation will discuss the respective roles and perspectives of engineers and lawyers in contract dispute resolution. Case study examples will be presented that discuss engineering related pitfalls in contracts that can lead to disputes regarding design specifications, division of responsibilities, contractual milestones, quality and performance guarantees, and warranty and defect claims. Key lessons learned and strategies for effective dispute resolution will also be provided.