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Volume 7 - Number 4 | January 26, 2009

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  EDITOR'S NOTES | Volume 7 - Number 4
Advertising jingles can be very powerful memory tools. For example, you’ve undoubtedly heard (and hummed), “You deserve a break today … at McDonalds.” The ad jingled its way to saturation more than 30 years ago, but we still remember it. Here’s another classic that first hit airwaves in 1981: “Be all that you can be” (U.S. Army). How legally credible are ad jingles and their associated promises? For example, if your bank proudly declares, “You concentrate on your dream. We’ll take care of everything else,” does that create a fiduciary relationship? For one couple, their trust in that very advertisement led them down an expensive road that dead-ended with a defaulted construction contract and a near $1 million debt. Did the ad promise stand up in court? No, it did not. The bank’s role in the construction process was self-serving. In no way did it promise to protect the couple from defective contract work.

This week’s second case is a second appeal of a case we presented several years ago. Following the terrorist attacks in 2001, all non-essential contractors were barred access to many military installations. Though exceptions were made to certain vendors, work suspensions did not merit compensation because the temporary shutdowns were a result of a sovereign act.

And third, an agreement between an owner and prime contractor at the inception of the contract effectively terminates all parties’ rights to file mechanic’s liens. A subcontractor’s timely mechanic’s lien is subsequently dismissed because of it.
  CONSTRUCTION LENDER INSULATED AGAINST RESPONSIBILITY FOR PROJECT
Reliance on advertising slogan promises does not create a fiduciary relationship between a lender and the homeowners it financed. When the project defaults, the homeowners are still liable for the construction loan despite the lender’s involvement with construction progress payments.
  SUSPENSION OF WORK RESULTED FROM SOVEREIGN ACT
A military construction contractor cannot receive compensation for a work suspension issued because of the terrorist attacks in September 2001. Despite inconsistencies in the enforcement of the exclusion order for non-essential personnel, the exclusion was general and compensation is not merited.
  SUBCONTRACTOR’S LIEN RIGHTS EXTINGUISHED BEFORE IT STARTED WORK
A contractual deal between an owner and prime contractor waives a subcontractor’s ability to file a mechanic’s lien before the work even begins. The sub has no say in the matter.