Volume: 19, Issue: 4 - 02/27/2021

 

It is not unusual for a construction contract to designate the owner’s project architect, engineer or other representative as arbiter of questions regarding contract requirements and scope of work. Are these decisions really as “final” as the contracts represent? And, what factors can the designated representative consider when making a decision?  This issue is addressed in the first case this week.  The second case deals with the loss of rights when a contractor fails to comply with state corporation filing requirements.

 

In an informative article written for Construction Claims Advisor, construction expert John Crane addresses iweather ssues that an owner needs to take into account when preparing construction documentaion and contract administration. Read more...


 

A prime contractor’s erroneous assumption when bidding the prime contract had no impact on the interpretation of a subcontract’s scope of work. When addressing a scope of work dispute between the prime and the sub, the project owner’s architect could not ignore the clear, unambiguous language of the subcontract.


 

A contractor’s corporate existence had been dissolved for failure to comply with state corporations law. The contractor lacked the capacity to enter into a federal construction contract and the standing to appeal a decision under that contract. When the construction contract was terminated for default for reasons unrelated to corporate status, the contractor had no recourse.


 

In an article by John Crane, Wrestling in the Mud or Dancing in the Rain: Planning for Mother Nature, published by Construction Claims Advisor in May 2013, the focus was placed on the questions and scenarios stakeholders need to consider when planning and tracking adverse weather in the project schedule.  The article addressed the ambiguities in some standard contract clauses addressing weather-related delays and time extensions. The 2007 edition of the American Institute of Architects’ AIA-A201 Standard Agreement (AIA) and the ConsensusDOCS were used as examples of contracts that included such ambiguities. Although these contract documents have been updated in recent years, the clauses referencing weather-related delays and time extensions remained relatively unchanged.


Volume: 19, Issue: 3 - 02/15/2021

 

Judicial and administrative rulings on construction disputes can be cautionary tales. Through inadvertence or intentional corner-cutting, parties can create serious problems for themselves. The three cases covered in this issue involve contractor misjudgments: paying a subcontractor off the books, ignoring a claim filing deadline and failing to use a written contract.

 

Paying workers with cash created massive headaches for a contractor in the first case covered in this issue.  The second case involves a federal government project where the contractor assumed the extended time consumed in attempting to negotiate a change order would extend a claim submission filing deadline.  In the last case, the contractor was lucky, recovering payments owed despite violation of a state licensing statute. Read more.


 

A subcontractor and crew were deemed employees of a prime contractor for purposes of workers compensation insurance responsibility. The contractor argued it had no business relationship with the sub, but evidence indicated the contractor had paid the sub with cash. The contractor corporation and its principal shareholder were both liable.


 

A contractor’s request for an equitable adjustment was established when the operative facts of a claim occurred. The request itself was not a valid claim. A subsequent proper claim, submitted after protracted negotiations, was not filed in a timely manner.


 

A licensed residential homebuilder could recover payment on an oral contract, notwithstanding a statutory requirement that contracts “shall” be in writing. The licensing statute imposed sanctions for violating the written contract rule but did not render oral contracts void. That consequence was reserved for unlicensed contractors.


Volume: 19, Issue: 2 - 01/29/2021

 

In most states, an unlicensed contractor cannot enforce a construction contract against the project owner. This includes suing for payment under the contract. The policy is to protect the public from shoddy work performed by unqualified constructors. This week's first case involves a surprised ruling in favor of an unlicensed contractor against an architect.

 

The other case this week relied upon the contractor's CPM schedule to reverse a contracting officer's default termination decision. This ruling was based in part that because the board found the contracting officer did not consider information contained in the narrative report that accompanied the CPM submission!  Read more.


 

North Carolina recognizes a contractor’s right to sue design professionals for economic loss caused by the designers’ failure to exercise due care in fulfilling professional responsibilities on a project. North Carolina also recognizes that an unlicensed contractor cannot enforce the construction contract against the project owner. But the precedent and policy of the “licensure defense” does not prevent an unlicensed contractor from suing design professionals for negligence.


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