Contract documents

December 20, 2022

It is not uncommon for contractors to encounter hazardous materials like asbestos on a construction site, especially when working on buildings that were constructed prior to the 1976 enactment of the Toxic Substances Control Act that banned the use of PCB manufactured products.  From a risk management perspective, both in terms of individual and project well-being, it is important for a contractor to understand how to respond when they discover hazardous materials.

• The first step should be to immediately stop work in the affected area and notify the owner and architect.
• If the contract documents include any requirements related to the encountered hazardous material, the contractor should make sure it is aware of, and in compliance with, those requirements.
• In addition to any contractual requirements, the contractor should be aware of, and in compliance with, any applicable regulatory requirements, such as OSHA standards.
• Once the owner has been notified, the contractor should keep its teams away from the affected area until the owner has had the opportunity to obtain the services of a licensed laboratory to verify the presence of the hazardous materials, and the owner has rendered the hazardous material harmless through proper abatement efforts.
• Given the risk of bodily harm to the contractor’s employees, the contractor should only resume work in the affected area upon written mutual agreement with the owner that the work in those that area should resume.
• Additionally, the contractor should negotiate and execute a change order with the owner and architect to appropriately adjust the contract time to account for the delay and to adjust the contract sum for any additional costs the contractor incurred related to the shutdown, delay and start-up of the work in the affected area.

For a full understanding of the rights and responsibilities of the contractor and owner relative to hazardous materials, please see Section 10.3 of A201- 2017 General Conditions of the Contract for Construction.

AIA Contract Documents has provided this article for general informational purposes only. The information provided is not legal opinion or legal advice and does not create an attorney-client relationship of any kind. This article is also not intended to provide guidance as to how project parties should interpret their specific contracts or resolve contract disputes, as those decisions will need to be made in consultation with legal counsel, insurance counsel, and other professionals, and based upon a multitude of factors.