Executive Insights 2025: Leaders in Construction Law

In a recent Construction Executive article on the ongoing effects of tariffs, Anthony Byler emphasizes the importance of revisiting escalation clauses to help contractors manage rising costs and supply chain delays.

“The full impact of tariffs is not likely to be felt for months. And no one knows for certain whether current tariffs will be reduced or increased. In the short term, however, it is reasonable to expect that the cost of commodities and equipment are likely to continue to increase, while their availability decreases. For contractors working under fixed-price contracts, tariffs can independently make good projects losers. So, there is no better time than the present to dust off escalation clauses—which allow the contractor to recover some to most increases to material costs—that came to popularity during the pandemic. Escalation clauses should be negotiated into future contracts. For existing contracts, contractors should alert their customers to significant increases in the cost and time to secure materials, asking those increases to be treated as changed conditions because they were unforeseeable at the time of bid.”