What is Tort in Construction

Law of Torts and the Construction Industry

Torts: Overview

Denotes a breach of duty imposed by law

Nature of the Duty: To act as a reasonable person exercising reasonable diligence

Tort exceeds the obligation of a party under contract: the duty could be to the other party in a contractual relationship, as well as to any third party who, it is reasonably foreseeable, would get affected by the actions of a person.

Torts: Relevance for Construction Contractors

There must be a wrongful act committed by a person.

The wrongful act must give rise to a legal damage or actual damage.

The wrongful act must be of such nature as to give rise to a legal remedy in the form of an action for damages.

Construction Contracts should be watertight to provide complete framework for liability between the parties.

Tortious liability would therefore be limited to the category of liability to a third party.

Badly drafted construction contracts can open tortious liability between the parties, since there can be concurrent liability under both tort and contract.

Torts: Basic Principles affecting Construction Contractors

Torts: Defenses and Strategy against Tortious Liability

“You must take reasonable care to avoid acts or omissions which you can reasonably foresee would likely to injure your neighbor. Who then in law is my neighbor?…persons who are so closely and directly affected by my act that I ought reasonably to have them in contemplation as being so affected when I am directing my mind to the acts or omissions which are called in question.”

Facts are critical in tortious cases. Contractors should therefore maintain clear records of activities and obtain Owner’s agreement to the records on regular basis. (E.g.: In large EPC Contracts this is done through weekly/monthly progress meetings).

The specific defenses against tortious claims are tailored to the facts of each case and are based on challenging the basis of liability:

Causation

Remoteness Foreseeability

Intervening Acts or events

Mitigation of Damages not taken by Plaintiff.