USA – NEW JERSEY Law and Practice Contributed by: David Freylikhman, Cory Mitchell Gray, David Jensen and Jody Saltzman, Greenberg Traurig LLP
neers. These disciplines may either be sepa - rately engaged or engaged under the respon - sibility of the designated architect, developer, design-builder or EPC contractor. Regardless of the approach, there are also commonly other professional disciplines that will be engaged separately, such as those providing geotechni - cal or environmental site services to assist in the design and engineering considerations for the intended project, among other things. For construction, management of the project is often assigned to a construction manager who is either “at risk” , holding all the contracts for subcontractors, or “not at risk” , meaning that the owner holds all the trade contracts for the work, with the construction manager admin - istering those contracts as the owner’s agent. The responsibilities may also be expanded in the context of a design-build contract or EPC approach; further responsibilities of the con - struction manager often include certain dele - gated design-assist and/or limited design-build scope responsibilities, notwithstanding the separate engagement of the architect or other professional disciplines. Owners that elect to use a general contractor may also elect to engage a project manager or other owner’s representative to assist the owner with project oversight and management. 7.3 Management of Construction Risk Construction risk in this jurisdiction is often man - aged by (among other things): • indemnification; • warranties; • limitations of liability; • delay damage limitations and other waivers of damages; • provisions relating to insurance;
• bonding and subcontractor default insurance; • subcontract pass-through provisions; • contingency (in the case of a guaranteed maximum price contract); • other economic provisions and controls (such as shared savings or other incentives); and • liquidated damages. New Jersey law prohibits an owner or other party from requiring contractual indemnity for dam - ages arising out of bodily injury to persons or damage to property caused by, or resulting from, the sole negligence of the owner or such other proposed indemnitees. Parties should, therefore, be mindful to tailor indemnity clauses appropriately so as to not risk having the provision deemed unenforcea - ble. Owners should be mindful to properly review and tailor insurance programmes to minimise potential uninsured exposures and require, by contract, that the contractor’s commercial gen - eral liability and excess/umbrella coverage be endorsed to include the owner as an additional insured, assuming the intended primary cover - age is provided by the contractor and not an owner’s project policy. There are continued concerns about supply chain disruptions and pricing volatility and, as a result, contractors and suppliers are qualify - ing pricing and scheduling commitments more so than has historically been the case. Owners should be mindful of such qualifications and consider appropriate contract contingencies. Relatedly, consideration should be given to practical remedies versus contractual remedies, since it is not uncommon to have a contractual recourse or remedy that does not, in practical terms, actually resolve the issue at hand (namely
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