When a contractor claim reaches the litigious stage, project owners frequently argue that the claim has been settled, waived, and/or released. But the owner’s history of dealing with the claim may undercut that argument.
A federal agency contended a contractor’s claim had been settled and released under the terms of two previous contract modifications. Subsequent to execution of those modifications, however, the agency had continued to negotiate the claim with the contractor. And, there had been considerable deliberation of the claim within the agency. This was inconsistent with the position that the parties had intended to settle and release the claim.
In another case in this issue, an unpaid subcontractor invalidated its mechanic’s lien by returning to the jobsite to perform repairs. The lien filing became premature because the California statute allows filing only after the subcontractor “ceases” work. And, the sub failed to re-file after the repairs.
The third case involved contractor compensation under a cost-plus contract. The contractor’s billings included trade work contracted separately by the project owner, as well as unsupported hourly charges for the operation of contractor-owned equipment.
