Volume: 15, Issue: 23 - 11/30/2017
Progressive property damage caused by defective construction is a challenge. By the time the problem is discovered, the project has been completed and is being utilized. The various contractors are long gone from the site. The nature and extent of the problem may not be self-evident. And, responsibility for the problem will almost surely be hotly contested. Read more.
A contractor’s successor insurers could be liable for progressive property damage caused by defective work performed prior to the period of insurance coverage. Property damage manifests itself, or “occurs,” when the essential nature of the problem becomes apparent.
While a contractual statement of work may have been voluminous, there was no evidence the contractor did not receive the entire document. The government’s slow response to the contractor’s request for information did not delay contract performance because the contractor’s questions were answered in the statement of work.
Volume: 15, Issue: 22 - 11/15/2017
A construction project experiences “excusable delay” when the delay is caused not by the project owner and not by the contractor, but by factors beyond the control and without the fault of either party. The most common examples are extreme weather and problems caused by third parties. Generally, construction contacts call for an extension of the performance period, but no additional compensation, for excusable delay.
When excusable delay is concurrent with owner-caused compensable delay, it effectively cancels the contractor’s entitlement to additional compensation. The rationale is that the contractor would have been unable to work anyway due to the excusable delay, so the contractor incurred no increased costs as a result of the owner-caused delay. There is an exception to this rule, however. Read more.
Where excusable delay is concurrent with compensable delay, a contractor may still recover if the government acted in bad faith and unreasonably delayed the contractor’s performance of the work.
A Maryland court has ruled that subcontractor payment recovery from the individual principals of the prime contractor, under a state construction trust statute, required proof of the subcontractor’s mechanic’s lien rights.
Volume: 15, Issue: 21 - 10/31/2017
Construction contracts frequently call for interest, or finance charges, on late payments. On private construction projects, these clauses are generally enforceable. The interest is assessed on the delinquent balance due. What happens, however, when the contractor has not paid its subcontractors or suppliers and the project owner is forced to satisfy those claims? Is the contractor still entitled to interest on the entire balance due under the prime contract? A Florida court recently answered in the affirmative. Read more.
A non-union electrical contractor’s problems with municipal inspectors resulted not from animus based on union status, but rather a reasonable difference of opinion regarding the quality and compliance of the work. The contractor availed itself of administrative avenues of appeal and prevailed.
A prime contractor was entitled to the contractually stipulated finance charges on the entire contract balance owed by the project owner, notwithstanding a set-off against that balance for a direct payment the owner was required to make to a subcontractor.
Volume: 15, Issue: 19 - 10/13/2017
Many businesses purchase commercial general liability (CGL) insurance coverage. As the name indicates, these policies are designed to provide comprehensive liability protection for the operation of commercial enterprises. The policies are not intended to provide product liability insurance. In the case of construction contractors, the policies expressly exclude coverage for property damage related to the contractor’s “work.” Read more.