Does Your Standard Subcontract Expose You to Unnecessary Liability?

By Sakib A. Khan, Esq. and Matthew W. Rossman

            Under Massachusetts law, unmodified, standard form subcontracts such as the AIA A401 can leave the general contractor unnecessarily exposed to potential liability for accident or injury.  As the Massachusetts Supreme Judicial Court has explained, “If the General Contractor retains the right to control the work in any of its aspects, including the right to initiate and maintain safety measures and programs, [it] must exercise that control with reasonable care for the safety of others, and [it] is liable for damages caused by [its] failure to do so.”

Recently, US District Court Judge Indira Talwani highlighted that under Massachusetts law, “Even when a general contractors degree of control falls short of that which would establish agency, the general contractor remains exposed to potential liability for negligence if it exercises any supervisory control – a situation typified by a general contractor’s foreman superintending the project as a whole.”  The critical factor is whether “the general contractor had any meaningful control, however minimal, over the subcontractor.” Courts look to subcontract language to establish the parties’ responsibilities.  In her recent case, Judge Talwani found that the contractor could retain significant control where the subcontract did not delegate nor divest the general contractor of its safety obligations.   In contrast, there is no significant control where the subcontract explicitly delegated safety responsibilities to the subcontractor and the general contractor only retained the right to suspend the subcontractor’s work upon noticing a safety violation.

To limit the general contractor’s exposure, the subcontract should delegate as much safety responsibility to the subcontractor as practical.  The Standard Form AIA A401 does not protect the general contractor on this front. In fact, A401§4.3.1 states that “The Subcontractor shall take reasonable safety precaution with respect to performance of this subcontract [and] shall comply with safety measures initiated by the contractor.” This language exposes the general contractor to potential liability for work site related injuries to the subcontractor’s employees and should be altered accordingly.

            Attorney Sakib Khan routinely advises clients on construction contract and subcontract drafting and negotiation.

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