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Future Build Consultancy is committed to providing learning and development seminars and sessions which can be logged as RICS Continuous Professional Development (CPD) for construction professionals.

On the 28th June 2017, Dominique Durham presented a 1 hour session on “Liability Caps” within construction contracts and professional appointments to CBRE Ltd in London.

Please see the below summary of the presentation:

  1. What are liability caps? – This section covers the definition of a liability cap which is defined as, “an agreement (usually contained within an engagement letter or construction contract) which limits the amount for which a party can be sued in the event of any negligence/breach of contract.” There is also a detailed, real-life scenario example to explain further.
  2. Types of liability caps – The various types of liability caps that can be incorporated into agreements and which can be considered for negotiation purposes are explained along with the various wordings that can be used in agreements.
  3. Financial Caps – The focus of this presentation was based on financial caps whereby it was defined along with further explanation and examples of the various methods of such caps.
  4. Professional Indemnity Insurance v Financial Caps – PI insurance often forms part of considerations when agreeing financial caps and in some cases is often confused with financial caps. Therefore, the presentation differentiates and explains both terms.
  5. Why are financial caps used?
  6. Considerations when agreeing financial caps
  7. Calculating a reasonable cap – The level of financial caps is often challenged and negotiated depending on numerous factors. This presentation will explain the various considerations to take into account when deciding what level of financial cap is reasonable to impose.
  8. Case Study – James Moores V Yakeley Associates Ltd.
  9. Conclusion

The above subject area is a key factor to consider when agreeing professional appointments and construction contracts. Therefore, it is important that we understand it and get it right when imposing to avoid any complications.