I remember the first Earth Day in 1970. I was a freshman in high school and our history teacher, Mr. Longo, perhaps sensing a moment in history in the making, asked for Earth Day volunteers to help pick up trash on an empty lot next to the bank downtown. It seemed like a good cause.
My friends and I signed up, figuring we had been too young to join any of the causes in the 1960’s, but this project was one even our parents couldn’t object to. We were right. It worked. By the end of the day the empty lot was greener. It still had weeds, but it was no longer choked with the paper, plastic, and glass debris that people threw out their car windows. (No, we weren’t recycling yet back then.)
Fast forward forty years. The lot in question has long since been developed and today’s building contractors are more interested than ever in green buildings. For better or worse, a whole slew of building regulations and requirements must be met before a new construction can earn the Environmental Protection Agency’s Energy Star label. It takes more than a signed permission slip from your parents. It’s complicated.
Because of the number of contractors involved in any new construction and the complexity of such a project, a significant amount of coordination is required to make sure all of the pieces align properly and meet the appropriate green standards. It requires frank and open discussion. That’s not always easy when everyone is gung-ho and eager to get started.
What needs to be discussed are not only the issues of who will do what, but also how the risk of not achieving the required operational energy and water saving targets will be allocated between the owner, contractors and design professionals. Contracts can help spell out the legal rules of the road; but, care should be taken when drafting the area of warranties.
Most insurance liability policies do not cover a breach of warranty claim. What that means for you if you are a contractor or design professional involved with a green building project is that you can be on the hook if you warrant that the project will achieve Green Star certification or performance and it fails to meet the mark. Good contract drafting can help you avoid such pitfalls, although the legal standards may be shifting in this area. Working with counsel experienced in this area is a must.
Good contract drafting, however, is a best business practice in any industry, particularly in the area of warranties. You really can only “warrant” that which you can “control.” Taking the time to analyze and identify what you can control versus what you can’t control will help you draft cleaner contracts and clarify expectations about who is responsible for what.
Responsible contract drafting means fewer legal hiccups. It contributes to greener cash flow. That’s another green cause we can all get behind.