Construction Law

The construction industry is no stranger to fluctuations in material costs, but tariffs add an extra layer of complexity. With duties on steel, aluminum, and lumber impacting pricing and supply chains, contractors and developers must be proactive in protecting their projects from unexpected cost increases and delays.

Beyond financial planning, there are key legal considerations that can help mitigate the risks associated with tariffs.

Contract Provisions to Address Tariff Risks

One of the most effective ways to manage tariff-related cost increases is through well-drafted contract provisions. Consider incorporating:

• Price Escalation Clauses – Allows for contract adjustments if material costs rise due to tariffs.
• Force Majeure or Change-in-Law Clauses – Protects contractors from delays or cost overruns caused by unexpected tariff changes.
• Material Substitution and Value Engineering Provisions – Provides flexibility to adjust material sourcing if tariffs make certain supplies cost-prohibitive.

Without these safeguards, contractors may be forced to absorb cost increases, which can lead to disputes and financial strain.

Tariffs and Supply Chain Disruptions: Legal Implications

Tariffs can also result in supply chain delays, which in turn affect project schedules. Ensuring that your contracts address potential schedule impacts is critical. Liquidated damages, delay provisions, and notice requirements should be carefully reviewed to avoid liability if material shortages or price surges push back completion dates.

Additionally, government contracts and public projects may have specific regulatory compliance requirements related to tariffs and foreign-sourced materials. Understanding these obligations is crucial to avoiding penalties or bid disqualifications.

Why Legal Guidance Matters

Tariff policies can change rapidly, creating uncertainty for construction businesses. Ensuring your contracts are structured to anticipate and respond to these risks is essential for protecting your bottom line.  

Our Construction Law Team serves clients across West Virginia, Southwestern Pennsylvania and the surrounding region and can help you navigate these challenges by reviewing contracts, advising on risk allocation, and ensuring compliance with evolving trade regulations. If you’re bidding on a project or negotiating a contract and want to ensure your legal protections are in place, contact Bowles Rice today for guidance tailored to your specific needs