Newsletter
PCC URGES GOVERNMENT AGENCIES TO CAP CONTRAC-TOR'S LIABILITY
In a letter dated 21 August 2006, the Public Construction Commission requested that all procuring entities expressly specify an upper limit on contractors' liability for compensation in tender documents. In principle, the maximum liability should be equal to the total value of the contract. However, according to the nature of the procurement or in line with actual needs, the procuring entity may set a different maximum liability in the tender documents, as well as conditions under which the limit does not apply (e.g. willful misconduct, gross negligence, or infringement of intellectual property rights on the part of the contractor). The invitation to tender documents may also either party to pur-chase insurance, in order to reduce risk exposure.