If the owner buys the long-lead equipment itself, who carries defects and damage?
Owners now buy transformers, switchgear and generators directly to secure manufacturing slots, then hand them to the contractor to install. In the Ward County contract that equipment falls outside the contractor’s work, and outside its warranty, if it is defective, damaged in shipping or damaged by the owner in commissioning or after completion. The contractor answers only for damage it causes in installation or by failing to protect the equipment. The owner needs the manufacturer’s warranty and a delivery schedule that matches the build.
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What the filed contracts say
Contract
What the filed wording says
Nscale Ward County design-build
Equipment the owner buys and the contractor installs is outside the contractor’s work if it is defective, damaged in shipping or damaged by the owner.
Nscale Ward County design-build
The contractor gives no warranty on that equipment, except for damage it causes in installation or by failing to protect it.
The filed wording
Notwithstanding the foregoing, material and equipment that the Parties agree is to be directly purchased by Owner and subsequently installed by Contractor (“Owner-Furnished, Contractor Installed Equipment” or “OFCI Equipment”) shall not be deemed part of the Work hereunder to the extent such OFCI Equipment is defective, damaged during shipping or transport to the Site, or damaged by Owner during commissioning or subsequent to Substantial Completion. Design-Builder shall have no Warranty obligations under Section 3.5 regarding such OFCI Equipment except to the extent Design-Builder damaged such OFCI Equipment during its installation or subsequently failed to adequately protect it during the performance of the Work
Nscale Ward County data centre design-build agreement (AIA A141, four buildings near Odessa, Texas), section 1.4.12 · KiNRG S-1/A, Exhibit 10.13
Each extract is quoted from the contract as filed with the SEC, checked against the filed text when it was added; “…” marks words left out. Filers redact commercial terms, so a [***] or [*] is the filer's, not ours. The summaries describe the wording, not how a court would read it, and each contract's defined terms and other clauses can change the effect. General information drawn from public filings. It is not legal advice on any transaction, and using this page does not create a lawyer-client relationship. Views are personal.
InfraCompute Weekly
The week in compute finance, read from the filings.
Deals, terms and the clauses behind them, for the people financing data centres, GPU clouds and the power behind them. By Randeep Bubbra.
