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The term that establishes a specific time frame in which a lawsuit must occur, after which a designer or contractor's liability ends, is known as the statute of repose. This legal concept is crucial in construction law because it limits the time period in which individuals can bring legal actions for claims related to a construction project, irrespective of when the injury or defect might have been discovered.

The statute of repose provides a definitive endpoint for liability, often set for a certain number of years after the completion of the work, which helps to protect designers and contractors from indefinite exposure to claims. This time frame is independent of the statute of limitations, which typically starts when an injury or issue is discovered and allows for a longer period for a lawsuit to be initiated.

In contrast, business torts refer to wrongful acts committed against an organization but do not define a specific time frame for liability issues concerning construction projects. A liquidated damage clause pertains to the penalties associated with delays in project completion, which is a separate matter from liability time frames.

Understanding the difference between these terms is essential for construction managers and professionals, as it directly impacts risk management and the legal responsibilities of those involved in construction projects.