08/02/2021

Editor's Notes

Almost every default termination clause ever written treats nonconforming, noncompliant work as an act of default, a breach of contract. However, if construction contracts were terminated every time there was a workmanship issue, nothing would ever get built. Consequently, default clauses generally give the contractor an opportunity to correct the noncompliant work and cure the default. A recent decision by the Supreme Court of Washington illustrates the substance of a contractor’s right to remediate its own work.

 

The contractor received notice of work that did not comply with the specifications and was given 15 days, as stipulated in the contract, to correct the problems. The contractor submitted a proposal for remedial work to the municipal project owner and requested a meeting. The city engineer refused to meet, later testifying he had lost confidence in the contractor. The court ruled that the subsequent default termination had been improper. The project owner had a duty to consider the contractor’s remediation proposal in good faith.

 

The other case in this issue involved a federal agency’s duty to inform a contractor of its right to appeal the denial of a claim. When the government contracting officer provided inaccurate information, the 90-day appeal period did not start to run. The ruling came despite the fact the correct information was readily available on the Board of Contract Appeals website.

 

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