Standard of Care Isn’t Just for Designers: How Courts Scrutinize Owner Oversight

Most owners don’t picture themselves in the crosshairs of a construction claim.

They fund the work, show up to meetings, and let contractors “do their job.” When something goes wrong, they assume the risk lies with the designer or contractor. After all, owners don’t pour concrete or draw plans, so for what could they be liable?

As construction projects have become more complex, courts and arbitration panels have expanded the lens of liability. Standard of care is no longer just a design concept—it applies to owner behavior during project execution. And increasingly, owners’ inactions can be as risky as their actions.

Legally Implied Duties
Every construction contract is built on more than its express terms. The law imposes implied duties—responsibilities so foundational that they apply whether they’re written down or not.

Among the most important of these responsibilities:

• Do not hinder or delay the contractor’s performance.
• Provide accurate and timely information and approvals.
• Coordinate work among multiple prime contractors.
• Disclose material site conditions or project risks.

These obligations arise under the implied covenant of good faith and fair dealing and are enforceable. When breached, they can form the basis for compensable delay, disruption, or even breach-of-contract claims, regardless of how well the owner thought it was doing.

How Owners End up in Trouble
Claims professionals and attorneys regularly see owner-side issues at the heart of disputes because of common mistakes:

1. Delayed Approvals of Submittals, RFIs, and Change Orders
Contracts often require owners to respond within a set number of calendar or business days (typically 14 to 30 calendar days). When owners miss deadlines, and a delay lands on the current critical path, the contractor may be entitled to additional time and money.

2. Inaccurate or Incomplete Site Information
Even if an owner doesn’t physically investigate every site condition, it must disclose what it does know. Concealing or omitting relevant data (matters of substance) may be seen as active interference.

3. Lack of Coordination among Multiple Prime Contractors
Owners using multiple direct contractors (a common approach in heavy industrial and infrastructure work) must actively manage interfaces. When one prime’s delay cascades into another’s, and no coordination framework exists, the owner often bears the blame.

4. Late Delivery of Owner-Furnished Materials or Equipment
If the owner is responsible for supplying equipment or materials such as turbines, piping, and structural steel, then any delay in procurement, delivery, or readiness can derail the contractor’s sequence and expose the owner to claims.

5. Interference with Means and Methods
Owners may offer input but directing how a contractor performs its work, even informally, risks crossing the line into liability. Courts draw sharp distinctions between coordination and control.

Legal Standards and Consequences
When these issues reach a court or arbitration panel, claimants typically present two things:

• A delay analysis, showing the causal link between owner conduct and critical path slippage
• A legal argument, showing how the owner’s conduct breached either express or implied contract obligations

Judges and arbitrators will ask these questions:

• Did the owner act reasonably under the circumstances?
• Were the owner’s actions (or inactions) foreseeable as project impediments?
• Was the delay or impact avoidable had the owner fulfilled its duty?
• Did the contractor notify the owner of the issue and give the owner a chance to cure?

In these disputes, owner silence and lack of awareness are not defenses. Courts expect parties to understand and manage their responsibilities.

Your Schedule Is Exhibit A
Delays aren’t just argued; they’re modeled. If an owner delays an approval, fails to coordinate work between primes, or doesn’t provide site access on time, a forensic schedule analysis will usually quantify the delay impact. If the delay is on the current critical path, and the contractor has contemporaneous documentation, the owner may find itself responsible for days or weeks of added cost.

Even worse, if the owner’s conduct contributed to overall project delay, it may lose the right to assess liquidated damages for the period of owner-caused delay.

What Proactive Owners Do Differently
Avoiding this type of liability isn’t about doing the contractor’s job. It’s about doing your own job and documenting it clearly. Here are key risk-reduction strategies:

Align Internal Processes to the Contract.
If you’ve agreed to review submittals within 30 calendar days, make sure your internal workflows, technical reviewers, and final approvers are aligned to meet that deadline, not just in policy, but in practice.

Clarify Roles in Multi-Contractor Setups.
If your project has multiple primes or phased delivery, implement a coordination framework in the contract documents. Define responsibilities, establish lead entity roles, and document interface handoffs.

Conduct Readiness Audits.
Before issuing NTP or site access, confirm that owner-supplied laydown yards, roads, utilities, and permits are actually in place. Too many claims stem from an early green light.

Don’t Direct the Contractor … Even Helpfully.
Be careful how you phrase emails and field instructions. A suggestion can become a directive in court if it’s interpreted as the owner controlling means and methods.

Track All Decisions and Delays.
If you need more time to review a submittal or approve a change order, communicate this and explain why. Silence creates ambiguity; ambiguity creates claims.

Final Thoughts
In today’s complex projects, owner obligations don’t end with writing checks. Owners play an active role in delivering the job, and when their performance is lacking, even unintentionally, they may be liable. The standard of care has expanded. So must the owner’s awareness.

If you’re heading into a major project or navigating an existing dispute, make sure you understand not only what you owe under the contract, but how your behavior is measured against professional norms. Because in construction disputes, it’s not always actions that matters most… Inactions could land you in court.

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