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Volume: 17, Issue: 22 - 12/02/2019

 

The partial withholding of funds from periodic progress payments is customary in construction contracts. The “retainage” is to be released upon completion of the work as final payment under the contract. This leads to disputes regarding the refusal to release retainage. Two of the cases in this issue involve such questions involving subcontractor payment disputes.

 

The third case in this issue addresses liquidated damages for late completion. A Tennessee court ruled that a contractor could not assess liquidated damages against a subcontractor when the contractor had also contributed to the late completion of the project.  Read more.


 

A prime contractor issued a retainage check to a subcontractor accompanied by a document where the sub acknowledged receipt of payment in full. This would effectively release an existing delay claim of the subcontractor. The sub did not receive the retainage until the contractor assured the sub that its delay claim was reserved, enabling the sub to endorse the check.


 

While the last-minute modification of a subcontract retainage provision was unartfully drafted, the intent was clear. The subcontractor was not entitled to release of retainage until the sub had completed the subcontract scope of work.


 

A contractor that contributed to late completion of the project could not assess liquidated damages against its subcontractor even if the sub’s contribution to late completion exceeded that of the contractor.


Volume: 17, Issue: 21 - 11/15/2019

 

The signature on a bid is crucial. When a public project owner receives a bid, the owner must be able to ascertain the identity of the individual signing the bid and the authority of that individual to bind the bidder to the bid. What level of certainty is required and how is this established? Two of the cases in this issue address these questions.

 

The Armed Services Board of Contract Appeals addressed for the first time the use of digital signatures on bids. Two other cases in this issue include one that ruled a public bid solicitation invalid and the other dealing with what rights of a takeover surety that the court upheld but encouraged abandonment of the precedents that governed the ruling. Read more.


 

Digital signatures are “verifiable” and can be used for signing claim certifications and other contract documents. Digital signatures comply with the Contract Disputes Act and the Federal Acquisition Regulation. They are not subject to instant verification requirements more stringent than those applied to ink or electronic signatures.


 

A state agency could impose terms in a bid solicitation that were in addition to the state public bidding law. However, the agency could not restrict the terms of the statute. That created a conflict and rendered the solicitation a nullity.


 

A takeover surety on a federal construction project had standing to assert claims against the government arising out of the takeover agreement, but could not dismiss the contractor’s appeal of its default termination, which was filed prior to the takeover agreement. This was true notwithstanding a broad indemnification agreement between the surety and the contractor, which purported to assign to the surety all the contractor’s rights under the construction contract in the event of a default.


Volume: 17, Issue: 20 - 10/31/2019

 

There are individuals who consider themselves “designers.” When they represent themselves to the public in this manner, it raises a number of questions. Are they implying they are licensed design professionals? If not, what is their role? What is the lawful scope of services they can provide?

 

An individual in Minnesota had never been a licensed architect, yet she used that term when offering services to the public. When cited for violating the state licensing statute, she replied that she had never used the term “architect” as a stand-alone title. She had described herself as a “design architect” or a “residential architect.” Read more.


 

An unlicensed individual’s use of terms such as “design architect” and “residential architect” conveyed the impression the individual was a licensed architect, thereby violating the state licensing statute. The Board of Architecture did not violate the individual’s First Amendment rights by confiscating the common term “architect.” The First Amendment does not protect untruthful misrepresentations.


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