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ConstructionPro Week, Volume: Construction Advisor Today - Issue: 4 - 05/20/2009

From Bruce Jervis, Esq

“Notice of claim” requirements are found in almost every construction contract. Typically, the contractor must provide written notice within a certain number of days of any event or occurrence giving rise to a claim for a price adjustment. Frequently, the notice must include a statement of costs.

 

These notice requirements are awkward for contractors. To begin with, the other party is probably well aware of the problems causing increased costs. It seems adversarial or litigious to be constantly serving written notices of claims. Additionally, the contractor may be uncertain of the actual increased costs that will be incurred. What is the contractor supposed to do, serve weekly notices with an updated account?

 

The problem for contractors is that notice requirements are sometimes enforced in court. Lack of timely written notice may be a powerful defensive tool. An Ohio subcontractor learned this recently. The sub provided timely written notice of the initial adverse conditions but failed to follow up with written notice of the resulting acceleration of the schedule or notice of the lost labor productivity incurred due to the acceleration. A quarter million dollar claim was dead in the water. Advisor Today would be interested to hear how others tread the difficult path of protecting claim rights without appearing overly adversarial.  Featured in the May xx, 2009 issue of Construction Claims Advisor:

    * Claim Notice Did Not Cover Lost Labor Productivity
    * False Claims Act May Apply to Highway Projects
    * Wrongfully Terminated Sub Recovers Lost Profit at Daily Rate

Bruce Jervis, Esq., Construction Claims Advisor

 

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