As solar power projects multiply and the rules around them grow more complex, contract disputes caused by external factors beyond the contractor's control are becoming more common.

Attorney Sungwoo (Goni) Kim of SOLARIS recently contributed a column analyzing the key issues contractors should watch for when entering into EPC (engineering, procurement and construction) contracts for solar power plants.

If a contractor simply accepts clauses that shift full responsibility for permitting delays or resolving local complaints onto it, the contractor may end up absorbing unexpected losses. When drafting the contract, the contractor's scope of work should be clearly limited to physical construction and document support, and the contract should set exemptions from and a cap on liquidated damages for events such as bad weather or administrative delays. To be paid on time, the contractor should also tie completion to actual physical completion rather than to the start of commercial operation.

SOLARIS will continue to study the legal issues arising in the renewable energy and construction markets and provide practical legal advice so that our corporate clients are not left bearing unfair losses.

- Original column: Solar Power Plant EPC Contracts: Key Issues to Review to Avoid Unfair Losses