Disclaimers and Site Visit Requirements

IV. DISCLAIMERS AND SITE VISIT REQUIREMENTS

A. Generally

Typically, construction contracts contain provisions that require contractors to visit the site to examine and become familiar with site conditions. This is one way that the owner shifts some responsibility for site conditions to the contractor. Construction contracts also frequently disclaim the owner's liability for site condition inaccuracies in the contract documents and the reliability of subsurface information such as drilling logs.

The unforeseen site conditions clause, however, typically supersedes the disclaimers when the subsurface site conditions differ "materially" from those "indicated" in the contract documents.⁶⁹ Courts typically cite the policy behind unforeseen site conditions clauses, described above, when holding that the contract disclaimers will not be enforced against the contractor.⁷⁰ The contractor still must act reasonably in relying on the information provided in the contract documents.⁷¹

Courts often reference the well-established rule that "broad exculpatory clauses . . . do not relieve the defendant of liability for changed conditions."⁷² Likewise, "general portions of the specifications should not be read to override the Changed Conditions clause."⁷³ The court decisions citing to this well-established rule often use it to emphasize that, in unforeseen site condition cases, even the words of the contract may involve questions of material fact especially when there are a variety of specific contract provisions that appear to contradict the broad exculpatory language or other disclaimers.⁷⁴ Ultimately, the unique facts of each case, including the information provided and/or withheld, how it was presented, and how each contract provision or disclaimer relates to these, will determine how any individual case is decided.⁷⁵

B. State Contracts

Maryland courts follow the above-said majority view. In Department of General Services v. Harmans Associates,⁷⁶the court upheld a Maryland State Board of Contract Appeals (MSBCA) decision in which the MSBCA enforced the standard state unforeseen site conditions clause despite other disclaimers in the contract. The opinion is especially noteworthy because the contract at issue in Harmans did not actually contain an unforeseen site conditions clause.⁷⁷ In Harmans, the Maryland Department of General Services argued unsuccessfully that the contract was not a procurement contract for construction and therefore need not be read as if it contained the unforeseen site conditions clause required by COMAR 21.07.02.05.⁷⁸ After holding that the contract at issue was a procurement contract for construction, the court decided that the unforeseen site conditions clause was, as a matter of law, incorporated in the contract and held that this incorporated clause must be enforced over the express disclaimers that were actually included in the contract.⁷⁹ The Court noted that to hold otherwise would have allowed the Maryland Department of General Services and the contractor to "thwart [a] legislative mandate."⁸⁰ The Court also cited to the policy behind unforeseen site condition clauses discussed in Foster Construction C.A. & Williams Bros. Co. v. United States.⁸¹The Court noted that the MSBCA has adopted the reasoning of Foster Construction in interpreting the Maryland unforeseen site conditions clause with respect to disclaimers.⁸²

The importance of an unforeseen site conditions clause is underlined by the case of Joseph F. Trionfo & Sons, Inc. v. Board of Education of Harford County.⁸³The Trionfo case is a classic unforeseen site conditions case. The owner provided test borings to the contractor, and when the contractor later encountered an unexpected amount of rocks during its excavation of the site, it put in a claim for additional compensation for the additional work. The owner claimed that the additional compensation was not warranted because of several disclaimers in the contract. Unlike in Harmans, however, the contract at issue in Trionfo did not contain, and was not required to contain, an unforeseen site conditions clause. Further, to obtain the test boring data, the owner required that the contractor submit a written request stating that the contractor "releases the Owner and Architect from any responsibility or obligation as to its accuracy or completeness or for any additional compensation for work performed under the contract due to assumptions based on use of such furnished information."⁸⁴ The Court noted both this explicit waiver and that "the exculpatory and disclaimer clauses [contained in the contract] are specifically directed at the subsurface soil conditions."⁸⁵ The court also explicitly noted the lack of an unforeseen site conditions clause, stating that "[t]he parties here embarked upon this project without the benefit of such a provision."⁸⁶ Based upon all of these factors, the court held that the contractor was not entitled to additional compensation because the contractor had not reasonably relied upon the test boring information. The court was clear, however, that all of these facts contributed to its decision. The court closed by stating that "[w]e do not hold that an exculpatory clause disclaiming any responsibility for the accuracy of information provided by an owner to a contract bidder will always relieve such an owner from the consequences of a misrepresentation."⁸⁷ Rather, the court stated that under the specific facts of the case, the contractor's reliance on the test boring information was not warranted.⁸⁸

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