The Risk of the Unexpected in Sub-Surface Construction Contracts

In the early days before the development of a technique for preliminary underground exploration, it was customary for the contract to provide that the risk of the unexpected should fall on the contractor. Broadly worded contract cl a uses took the place of scientific and careful investigation. This practice often resulted in a higher total cost to the owner, since contractors, perforce, added an arbitrary sum to their bids to cover possible difficulties (1 (a)) ;² that is, the owner passed on the risk to the contractor and paid a substantial premium for this insurance against loss. Modern standards of sub-surface investigation, as detailed in the Society’s Manual of Engineering Practice No. 8 (1), have eliminated much of the costly uncertainty involved in underground construction, with corresponding benefit to owner and contractor. Indeed, the cost of supplying the contractor with complete data on subterranean conditions will generally be less than the sum contractors would charge for blindly assuming all risks.