12/19/2018

Editor’s Notes

A classic differing site condition claim alleges actual conditions in the field that differ materially from conditions represented in the contract documents. A necessary foundation for such a claim is an affirmative contractual representation that is reasonably relied upon by the contractor. These are the most litigated aspects of site condition claims.


A federal contract for the design and construction of a building stated the average annual rainfall in the area of the site, but was silent regarding subsurface conditions. The contractor’s geotechnical consultant encountered groundwater at a depth of 19 feet. Then the rain came. A month of near-record rainfall raised the groundwater to nine feet below grade. The contractor said it was forced to alter its method of installing concrete foundation piers, which incurred delays and increased costs.


This was not a viable site condition claim. A statement of historic average was not a representation of weather conditions during the performance period. And, any contractor reliance on that average to extrapolate or predict groundwater levels would be unreasonable.


The other case in this issue involved an insurance company’s right to sue a contractor under an indemnification clause in the construction contract. The insurer’s insured party, the project owner, was a suspended corporation. The insurer, subrogated to the rights of the project owner, was not entitled to file suit.

 

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