United States: Smart Contracting For Green Design And Construction

Last Updated: March 1 2013
Article by Joyce K. Hackenbrach

Successful green building requires more planning and, preferably, a greater degree of integration in overall project delivery, than building without green objectives. All of the major third-party green certification systems — including LEED, Green Globes and Designed to Earn the Energy Star — have recognized this, as have numerous agencies of the federal government, which has been a leader in studying and promoting green building.

But, despite this acknowledgement, many parties continue to use contracts that include no specific provisions addressing critical green issues, such as: how a project's green goals will be defined and integrated into the overall project requirements; how the parties will determine the specific green measures to be taken to achieve those goals; who is responsible for determining the goals, means and methods, and then for carrying out the green measures; and who is responsible, and to what extent, if the project's green goals are not achieved.

A prime example of this kind of contractual deficiency is provided by the green litigation case, Southern Builders Inc. v. Shaw Development LLC. Southern Builders arose from a project to build the Captain's Galley Luxury Condominiums, a 23-unit condominium and restaurant project in Somerset County, Md. The manual for this project included a statement that it was to comply with LEED Silver certification requirements. But the contract documents apparently omitted to mention that the developer had applied for, and relied on obtaining, a Maryland state tax credit that was dependent on the project's achieving a LEED Silver rating within a certain period of time. Nor did the parties modify the American Institute of Architects (AIA) contract forms to address how the project team would achieve the targeted Silver rating or who would be liable if the goal was not met.

The project was delayed, the developer apparently missed the deadline by which LEED Silver certification had to be achieved, and the developer lost the anticipated tax credit. When the contractor later sued the developer for unpaid balances and to enforce a mechanic's lien, the developer counterclaimed, alleging that the contractor had failed to "construct an environmentally sound green building, in conformance with a Silver Certifications Level according to the U.S. Green Building Council's ...LEED Rating System."

Based on this allegation, the developer claimed $635,000 in damages from the contractor — the amount of the tax credit the developer had failed to obtain. The case ultimately settled and so provided no case law guidance on green liabilities in such a situation. But groups — including the AIA — are keenly aware of the need for contract language to address green project issues.

In May 2011, the AIA, a proponent of both integrated project delivery and of green building, sought to address fundamental green contractual issues in AIA Document D503-2011, Guide for Sustainable Projects, including Agreement Amendments and Supplementary Conditions. The D503 serves as an educational tool for owners, designers and contractors. It includes discussion of "key issues related to [the] roles, responsibilities, risks and opportunities" inherent in green building. The guide also includes model language that can be incorporated into three of the AIA's most frequently used forms of contract document: the AIA Document A101-2007, Standard Form of Agreement Between Owner and Contractor, AIA Document A201-2007, General Conditions of the Contract for Construction, and AIA Document B101-2007, Standard Form of Agreement Between Owner and Architect.

In May 2012, the AIA issued Sustainable Project (SP) versions of the A101, A201 and B101, and also of AIA Document A401-2007, Contractor/Subcontractor Agreement and AIA Document C401-2007, Architect/Consultant Agreement. These five new SP forms of agreement are essentially the 2007 editions of specified AIA contracts, but modified to include provisions that specifically address green project issues. The salient changes in all of the documents include:

  • requiring the architect to conduct a sustainability workshop with the owner and relevant consultants, the product of which is a written sustainability plan identifying the owner's sustainable objective for the project, outlining the sustainable measures that will be implemented and allocating responsibility for each sustainable measure to a specific project team member
  • providing for further development of the sustainability plan as the design progresses, and for including the sustainability plan as a formal contract document
  • defining sustainability services that the architect will perform, including acting as the owner's agent for registering the project for third-party green certification, collecting and organizing the necessary documentation for certification and making necessary filings with the third-party certifier.
  • limiting the architect's responsibility for specifying green products with a limited track record for the project, by requiring that the architect disclose information about the limited track record, but making clear that the architect has the right to rely on the manufacturer's representations about the product if the owner elects to allow the product to be used.
  • requiring that a contractor proposing product substitutions include in its proposal a written representation on the potential effect the substitution may have on achieving a sustainable measure or sustainable objective and specifying that the architect is entitled to rely on the representation.
  • confirming that substantial completion continues to occur when the project is ready for use for its intended purpose — even though LEED, other third-party certifications or other sustainable objectives may not be achieved until well after the project is physically complete and ready for occupancy and even though the contractor or other parties may continue to have documentation, testing or post-occupancy commissioning duties after the project is physically complete and put into use.
  • disclaiming any warranty by the design professionals, contractor or subcontractors that the sustainable objective will be achieved.
  • modifying the existing waiver of consequential damages to make clear that damages due to unachieved energy or other resource savings, unintended operating expenses, lost financial or tax incentives or unachieved gains in worker productivity, due to failure to achieve a sustainable objective or sustainable measure, are all consequential, not direct and are all waived.

The AIA's new SP documents are intended for use on design-bid-build projects — rather than design-build or other, more integrated project delivery methods that are widely recognized as more suitable for promoting success in greening a project. As a result, the documents contemplate that the sustainability plan will be developed without the participation of the project's contractor who, in a design-bid-build project, is not hired until after both the sustainability plan and the project design are completed.

This article was first published in the February 20, 2013 issue of Green Building News (http://www.greenbuildingnews.com/articles/2013/02/20/smart-contracting-green-design-and-construction). It is reprinted here with permission.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Similar Articles
Relevancy Powered by MondaqAI
In association with
Related Topics
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.


The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.


Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions