Charrett, D. and Washington, D. (2012). InHouse Counsel, 293. July 2012.

Introduction

In the construction industry, contracts for design services are frequently viewed as another "trade" subcontract, and are prepared accordingly. The paper notes the key aspects of design contracts that distinguish them from trade contracts. It highlights several types of inappropriate risk transfer in design contracts, and suggests
that the owner's risks can be more appropriately managed to obtain the best value from the designer's services.

Key points

• In a construction project, the design is the foundation that determines not only the construction costs, but also the entire life cycle costs including operation, maintenance and refurbishment.
• Design costs are typically no more than 1% of the life cycle costs.
• Design contracts involve different considerations to other construction contracts and subcontracts.
• Employersshouldensurethatthecontractualarrangements for procuring the design are the most appropriate for achieving their objectives, the most important of which is to obtain a design of the required quality.