Negotiating Consequential Damages Waivers - Chapter 5 - AAA Handbook on Construction Arbitration and ADR - Third Edition
Charles M. Sink
Adam C. Dawson
Charles M. Sink is a Partner in San Francisco’s Farella Braun + Martel LLP, and has been recognized as one of the leading construction attorneys in California in each issue of the Chambers USA Guide to America’s Leading Business Lawyers. Mr. Sink received his B.A. from Harvard University and his J.D. from Hastings College of Law, University of California. He is the author of several books and chapters on construction agreements and ADR.
Adam C. Dawson is a Partner at Farella Braun + Martel LLP, where he formerly acted as chair of the firm’s construction department. He has been recognized as a leading construction lawyer by both PLC Which Lawyer? and Best Lawyers in America. Mr. Dawson received his B.A. from Reed College and his J.D. from Boalt Hall School of Law, University of California, Berkeley.
The “waiver of consequential damages” provision became a part of the American Institute of Architects revised standard form construction documents in 1997, and has been retained, largely unchanged, in the AIA’s 2007 documents.1 These contracts are more widely used and copied, generally, than any other construction industry agreements. And because they provide for mediation and arbitration, consequential damages waivers in the construction context are more likely to be interpreted by the participants in mediation or by arbitrators, rather than by the courts.
This chapter offers practical advice about these waivers and suggests how they can be tailored to the particular transaction.