By Lee Harkin
Most risk allocation in construction contracts exists because there is enough delivered history behind a building type to price against it. Enough hospitals have been built that everyone roughly agrees who carries the risk of a delayed equipment certification. Enough warehouses exist that a change in soil conditions has a known place to land in the contract. The allocation isn’t perfect, but it’s informed by precedent, and precedent is what makes it enforceable rather than theoretical.
Facility types without that history don’t get that benefit, and the gap rarely shows up at signing. It shows up months into execution, in the places a standard contract assumes are settled: what counts as substantial completion when the commissioning sequence has never been run before, who owns a delay caused by a testing protocol that didn’t exist when the schedule was baselined, how a change is priced when there’s no comparable scope to price it against. The contract isn’t wrong. It’s just answering questions that don’t quite match the ones the project is actually asking.
This isn’t specific to any one sector. It shows up whenever the built environment is catching up to something new, whether that’s a facility type, a process requirement, or a regulatory standard that didn’t exist when the delivery model was written. The pattern repeats because the underlying cause repeats: risk allocation is a way of pricing the past, and a first-of-its-kind project doesn’t have one to draw on.
What tends to hold up better in these situations isn’t a longer or more detailed contract. It’s a different starting assumption: that some of what’s being allocated is genuinely unknown to both parties rather than knowable-but-unassigned, and that the contract needs mechanisms for testing and revisiting assumptions as the project learns, not just mechanisms for transferring risk once at the outset.
As more of what gets built has no direct precedent behind it, that stops being an edge case worth a clause and starts looking like the ordinary condition a lot of contracting will need to work under.
