This week at GBLU, we are focusing on the Shaw Development v. Southern Builders case, the first significant example of green building litigation. On Monday, GBLU explained the importance of the case and reviewed the basic facts. Today GBLU will review the most important part of the case, the contract between the parties and accompanying green building responsibilities.
Why is the contract the most important part of this case? The contract is the primary means for dictating a contractor’s green building obligations. Shaw Development and Southern Builders relied on an AIA A101-1997 Standard Form of Agreement Between Owner and Contractor as their general contract, which did not include green building requirements. Additional requirements were incorporated through a Project Manual that made specific reference to green building certification:
Project is designed to comply with a Silver Certification Level according to the U.S. Green Building Council’s Leadership in Energy and Environmental Design (LEED) Rating System, as specified in Division I Section “LEED Requirements.”
Shaw Development’s AIA contract and incorporated Project Manual lack clarity in articulating Southern Builders’ responsibility for constructing a LEED Silver certified project. While the Project Manual does state that the project was designed to comply with LEED Silver certification, it does not assign the contractor responsibility to construct the project according to LEED Silver certification. Instead, as stated in A101-1997, the contractor is responsible for building according to the designs and specifications. Thus, the contractor could be liable if it failed to build according to plans and specifications, which resulted in a failure to achieve LEED certification.
Owners and contractors are well served to clearly describe the contractor’s responsibilities related to the construction of a green building project. If your green building contract looks anything like the contract from Southern Builders v. Shaw Development, you should think about revising it.
- The Anatomy of America's First Green Building Litigation (gbNYC)
- The First LEED Lawsuit...Great.... (Real Life LEED)
- Open the Floodgates: The Era of Green Building Litigation (Greener Buildings)