Volume: 17, Issue: 3 - 02/15/2019
A large percentage of private disputes are resolved through arbitration. In reviewing an arbitration award in a construction contract dispute, a federal appeals court recently said, “We have become an arbitration nation.” The court then defined the scope of an arbitrator’s authority when interpreting and applying contract clauses.
An erroneous legal interpretation of a clause by an arbitrator is not grounds to vacate an award. And, arbitrators are entitled to find that the parties to a contract, through their conduct, waived or modified a contract clause. However, an arbitrator does not have authority to disregard an express contract provision, effectively reading it out of the contract in order to produce a desired result. Read more.
Arbitrators may find that parties to a contract waive or modify the terms of that contract through their course of conduct, but arbitrators may not disregard the express terms of a contract in order to reach a desired result. An arbitrator exceeded his authority when he refused to enforce a subcontract clause against the subcontractor because it would produce an unjust result.
Although a federal contractor’s claim was subject to recalculation to avoid duplicative recovery, the amount of the revised claim could be determined through simple arithmetic calculations. The claim stated a “sum certain” and did not violate the Contract Disputes Act.
Volume: 17, Issue: 2 - 01/31/2019
There are two basic types of specifications. Design specifications provide precise, detailed instructions, which the contractor must faithfully follow in order to meet its contractual obligations. Performance specifications stipulate end results – capabilities and characteristics – which the contractor must achieve. The contractor must use its own experience and expertise to determine the best means and methods for achieving those results.
Performance specifications might seem beneficial to contractors, allowing more discretion and flexibility. In many ways, however, performance specs impose risks not presented by precise design specifications. This was illustrated in a recent California case. Read more.
A project owner did not extend an implied warranty of the sufficiency of a specification because the spec was of a performance, not a design, nature. The contractor was allowed discretion to devise the means and methods of achieving compliance with stipulated performance standards.
The critical path of a construction schedule may continually evolve during construction. The government’s approved pre-construction schedule and the contractor’s as-built schedule, standing alone, did not prove the critical path of construction.
Volume: 17, Issue: 1 - 01/17/2019
Building codes in most jurisdictions impose penalties, monetary fines, and sanctions against a contractor’s license for building without a permit. The laws typically refer to a “willful” violation. But does this mean a specific intent to violate the law or a more general intent to proceed with work without ascertaining the need for a permit? A California appellate court was recently presented with this question. Read more.
A contractor “willfully” violates building permit requirements if it intentionally proceeds with work without accurate knowledge of those requirements. No specific intent to violate the law is required in order to subject the contractor to statutory sanctions.
A contractor could not show that a defectively worded notice of default/final decision of the contracting officer was prejudicial. There was no evidence the wording caused the contractor to miss the appeal deadline. In so ruling, the Civilian Board of Contract Appeals articulated for the first time its approach in resolving conflicting precedent from its predecessor boards.
Volume: 16, Issue: 24 - 01/04/2019
Each of the circuits in the U.S. Court of Appeals is a semi-autonomous region of the federal judicial system. There is no requirement, constitutional or otherwise, that they agree on everything.
The Fifth Circuit, covering Texas, Louisiana, and Mississippi, has long been an outlier on the question of “controlling employer” (typically a general contractor or construction manager) responsibility for OSHA compliance with regard to employees of separate employers (typically subcontractors or trade contractors) at multi-employer construction sites. The Fifth Circuit has held that a contractor could not be cited for OSHA violations that affected only employees of other contractors. In a recent decision, the Fifth Circuit overruled itself in light of a U.S. Supreme Court decision that reflected a more mainstream viewpoint. Read more.