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Consequential Damages in Design and Construction Contracts: Mitigating Risks for the Parties

Interaction With Other Contract Provisions, Clearly Defining Damages, Jurisdictional Considerations

Recording of a 90-minute CLE video webinar with Q&A

This program is included with the Strafford CLE Pass. Click for more information.
This program is included with the Strafford All-Access Pass. Click for more information.

Conducted on Tuesday, May 14, 2024

Recorded event now available

or call 1-800-926-7926

This CLE webinar will discuss consequential damages arising from design and construction work and contractual waivers of consequential damages. The panel will take a deeper dive and discuss the pros and cons of such waivers, jurisdictional differences in interpretation, and best practices for drafting the waivers, including potential carveouts.


Consequential damages relate to indirect losses that arise from breach of contract by either party such as lost profits, damaged reputation, loss of business opportunities, and loss of use. Mutual waivers of consequential damages (mutual waivers) are regularly included in design and construction contracts, including form contracts such as in certain AIA documents because they limit the uncertainty of claims and the potentially excessive cost of potential damages.

However, these waivers can be problematic on a number of levels. A blanket waiver may deprive a party of a remedy for certain financial losses suffered. For example, a project delay could cause the owner to lose sales or rental income. It may also impede a party's ability to be indemnified for third-party claims.

Additionally, jurisdictions differ on what may constitute consequential damages so that the court's interpretation of the provision may result in the parties being liable for damages they meant to waive. And other contract terms can cause problems where they contradict what is in the waiver provision.

Therefore, counsel should understand under what circumstances mutual waivers should be used, how to draft the waivers clearly to reflect the parties' intent, how to ensure that the waiver does not conflict with other contract provisions, and how to use other provisions to mitigate risks for both parties (e.g. liquidated damages provisions) when including a mutual waiver in the contract.

Listen as our panel of experts discusses the risks and benefits of including mutual waivers of consequential damages in construction contracts and offers best practices for negotiation and drafting.



  1. Introduction
  2. Mutual waiver of consequential damages
    1. Risks
    2. Benefits
    3. Jurisdictional considerations
    4. Interaction with other provisions
    5. Provisions to mitigate risks for both parties
  3. Negotiating and drafting considerations
  4. Practitioner takeaways


The panel will review these and other important considerations:

  • What are examples of jurisdictional variations on what constitutes consequential damages? What effect should these have on drafting?
  • How may counsel use other provisions in the agreement to mitigate risk for their clients when including a mutual waiver in the contract?
  • How can other terms in the agreement impact the mutual waiver provision? And what are best drafting practices to ensure other terms do not contradict or negate the parties' intent?


Brunka, Christina
Christina K. Brunka


Ms. Brunka represents entities and individuals in construction-related matters. Her focus is contract development,...  |  Read More

Richey, Jason
Jason L. Richey

K&L Gates

Mr. Richey’s practice is concentrated in the areas of dispute resolution with an emphasis on the construction and...  |  Read More

 Thornton, Patrick
Patrick J. Thornton

Lewis Rice

Mr. Thornton practices primarily in the area of construction law. He represents all types of entities in the...  |  Read More

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