Cotney Discusses 2026 Construction Legal Trends in Construction Dive

Adams & Reese Partner and Construction Team Co-Leader Trent Cotney was recently featured in Construction Dive, offering guidance on legal trends shaping the construction industry in 2026. The article, part of the publication's "The Dotted Line" series, examines how contractors can protect themselves through strategic contract provisions amid evolving regulatory and market conditions.

Immigration Enforcement and Labor Costs

Cotney addressed how increased immigration enforcement is reducing the available workforce and driving up labor costs. Among his clients, he noted that labor pay rates have risen between 4% and 10% as a result. To manage these pressures, he recommends including price escalation provisions in contracts, a strategy that has proven effective across various market disruptions.

Data Center Construction

These cost pressures are particularly relevant as contractors evaluate new opportunities in the data center sector. With significant investment flowing into data center development, Cotney encouraged contractors to pursue these projects while exercising caution. He warned that some data center contracts include termination-for-convenience clauses that are less favorable than traditional industry standards.

"Traditional termination for convenience means typically you're entitled to all your costs and reasonable profit and overhead on what you did to date, but not future profit and overhead," Cotney explained. "With these that I've been seeing, it's more that you're only entitled to certain costs. They're very specific, and the owner is entitled to back-charge things for incomplete work."

Scope Creep

These complex, high-value projects also heighten the risk of scope creep. As construction systems become more sophisticated, contractors are increasingly asked to weigh in on matters beyond their primary skill set, including building performance specifications, fire codes, and manufacturer requirements.

"You've got contractors that are having to become architects, engineers, and lawyers all at the same time," he observed. To mitigate this risk, he recommends including design waivers in contracts that clarify any suggestions outside a contractor's expertise require sign-off from a licensed design professional.

AI in Construction Contracts

Adding to this complexity is the growing use of artificial intelligence across the industry. Cotney discussed the role of AI and the need for including contract provisions that address its limitations. The Adams & Reese Construction team has developed language ensuring that AI-generated scheduling or cost estimates are treated as preliminary until verified by field assessments, clarifying that customers cannot rely on such outputs until on-site verification confirms their accuracy.

As the legal landscape continues to evolve, contractors who proactively address these issues and incorporate safeguards into their contracts will be better positioned to manage risk and protect their interests. 

The full article is available on Construction Dive.