A new U.S. Postal Service change to the standard terms and conditions that apply to its newly awarded Highway Contract Route (HCR) and Contract Delivery Service (CDS) contracts could be unenforceable, according to David P. Hendel, writing in the Husch Blackwell Contractor’s Perspective blog.

The changes apply to existing CDS contracts as well as newly awarded ones. In an email, the Postal Service asked contractors to sign, without any “alterations or additions,” a contract modification that incorporated the new terms. If the contractor did not so, the Postal Service’s email threatened contract termination, Hendel writes.

He cited problems with the way the changes are presented, including lack of consideration, violation of the implied covenant of good faith and fair dealing, and the legal theory of coercion and duress.

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Waivers of consequential damages have become the industry standard in construction projects, and these clauses are found in most industry templates, writes Gregory Faulkner in Robinson+Cole’s blog, Construction Law Zone.

“No contractor wants to accept the risk that any one breach could lead to the financial ruin of its company,” he writes. “But does this clause, and others like it, go too far in the other direction?”

“Neither party should rely blindly on standard industry forms to define what losses are recoverable in the event of breach.  A project owner should analyze its potential exposures as part of its overall business plan for the project,” Faulkner writes.

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