[honte]

Typically, the technical definition of a party wall is a shared wall using the same foundation. This would be the case, for example, with the Gage Group in downtown Chicago - hence the huge settlement on the northernmost building, where they screwed up a bit. This building will come up (nearly) to the neighboring building, but I don't think it technically will qualify as a party wall. It should have its own outside envelope on that side, and certainly will be self-supporting.

I think they'd be crazy not to allow a few inches there for lateral movement. That would address the concerns you bring up, which are good ones.