Void Provisions in Ohio Construction Contracts

Brad C. Weber, Esq.

Construction companies that work in multiple jurisdictions encounter different rules and regulations in those different jurisdictions.  Ohio bars the use of several provisions commonly inserted into construction contracts.  Failure to account for these rules often results in a nasty surprise.  The classic example under Ohio law is Taylor Building Corp. of America v. Benfield, 117 Ohio St.3d 352, 2008-Ohio 938.  Benfield RULING/

Ohio Revised Code Section 4113.62 provides that certain construction contract provisions in Ohio are void as against public policy.  Provisions that are void under Ohio law include waiver of rights under a surety bond as well as forum selection clauses and alternative dispute resolution (ADR) provisions that require the parties litigate or conduct mediation or arbitration outside of Ohio.  Ohio law also bars, as void, clauses waiving existing claims or claims for delay damages in certain circumstances.  Finally, certain variations of pay if paid clauses are also void.

While most standard construction contracts in Ohio take these restrictions into account, companies doing business in surrounding states too often bring their own form of contract to the table.  When executed as is, without substantial adjustment, those contracts can be problematic, as the constructor in theBenfield case learned.  Taylor Building Corporation was a Kentucky company that attempted to utilize a Kentucky construction contract to build a home for a client in Ohio.

The lesson of Benfield is that contractors need to pay careful attention to the use of form contracts in Ohio, especially those drafted for use in another jurisdiction.  If you have any questions about a construction contract presented to you in Ohio do not hesitate to call BYH for assistance.