Construction Contracts - Lamson Dugan & Murray LLP

8 Jul, 2024

Flow-Down Clauses and Waivers—a Subcontractor’s Nightmare?

Craig Martin2024-07-09T14:46:15-05:00July 8th, 2024|Construction Contractor Advisor, Construction Contracts|

Flow-down clauses are common in subcontracts, particularly when the project involves several tiers of contractors. A flow-down clause incorporates various terms of the upstream contracts into the subcontract, even if the subcontractor has not reviewed the upstream contract. And, the incorporated clauses can act as a waiver of a subcontractor’s claims. Are you reviewing your flow-down clauses and all everything that they reference? The impact of a flow-down clause was [...]

7 May, 2024

Hope for the Best, Prepare for the Worst: Insurance Policies for Addressing Risks on Construction Projects

Andrew Wilkinson2024-05-07T11:29:47-05:00May 7th, 2024|Construction Contractor Advisor, Construction Contracts|

By: Callie A. Kanthack Construction projects involve significant risks to owners, designers, and contractors. Many of these risks are allocated in the parties’ contracts. Risks may also be allocated to insurance companies through policies. By providing coverage for losses, insurance companies protect against certain financial losses and may also indemnify and defend against any claims or lawsuits filed against you. The most common policies for construction projects include worker’s compensation, [...]

5 Mar, 2024

Not So Guaranteed: Can Small Losses Render a Sizable Liquidated Damages Provision Unenforceable?

Andrew Wilkinson2024-03-05T13:35:01-06:00March 5th, 2024|Construction Contractor Advisor, Construction Contracts, Latest News|

A “Liquidated Damages” provision should be a key part of your playbook when entering a construction contract. These damages typically apply when a party misses a performance deadline. The value of damages is usually expressed in a certain amount of dollars per day. Liquidated Damages are intended to avoid the difficult task of figuring out the economic impact of delayed performance. In many cases, an accurate estimation is quite difficult [...]

2 Jan, 2024

Your Contract Terms Should Not Be “Standard”

Andrew Wilkinson2024-01-02T11:30:04-06:00January 2nd, 2024|Construction Contractor Advisor, Construction Contracts, Nebraska Construction|

Many clients come through our doors because a project has gone wrong due to obligations they unknowingly take on after signing “industry standard” contracts. Standard industry contracts make for good starting points, but careful contractors will want to move beyond, or at least study, the “typical” terms in a contract to maximize the opportunities for success on a project, including being paid for the work you complete. Form Contracts Favor [...]

8 Dec, 2023

Open Communication and Good Contracts Keep the Peace

Craig Martin2023-12-08T11:11:12-06:00December 8th, 2023|Construction Contractor Advisor, Construction Contracts|

It is a common occurrence for a home construction project to encounter delays, whether due to a change in project scope, weather conditions, delayed building materials, or a labor shortage. These delays can cause problems which can be avoided with a simple concept: open communication and clear provisions in a construction agreement. Oftentimes, an issue arises early in the building process that, if identified and communicated early, could have been [...]

23 Oct, 2023

Is a Contractor Entitled to Prejudgment Interest on Contracts in Nebraska?

Craig Martin2023-10-23T14:54:17-05:00October 23rd, 2023|Construction Contractor Advisor, Construction Contracts, Nebraska Construction Law|

In a recent ruling by the Nebraska Supreme Court, the answer was YES. Nebraska’s prejudgment interest statute provides that parties are entitled to twelve percent (12%) interest per annum on money due on any instrument in writing (such as a contract), unless the parties agree on another amount or to waive contractual interest. The statute provides that the account bears interest from the date of billing unless paid within thirty [...]

16 Jan, 2023

How to Protect Yourself When the Job Site Isn’t What You Expected.

Craig Martin2023-01-14T07:59:25-06:00January 16th, 2023|Construction Contractor Advisor, Construction Contracts, Differing Site Conditions, Nebraska Construction Law|

It happens far too often – you show up at a job site that ends up much different than what you anticipated. What is your best course of action? First, look at your contract. Do you have a differing site conditions or changed conditions clause? Absent such a clause, you may be required to assume any additional difficulty, burden, or expense. However, even in the absence of such a clause, [...]

16 Jan, 2023

How to Protect Yourself When the Job Site Isn’t What You Expected

Andrew Wilkinson2023-01-16T01:00:38-06:00January 16th, 2023|Construction Contractor Advisor, Construction Contracts, Differing Site Conditions, Nebraska Construction Law|

It happens far too often – you show up at a job site that ends up much different than what you anticipated. What is your best course of action? First, look at your contract. Do you have a differing site conditions or changed conditions clause? Absent such a clause, you may be required to assume any additional difficulty, burden, or expense. However, even in the absence of such a clause, [...]

23 Feb, 2022

Modifications and Release Agreements in Construction Contracts

Craig Martin2022-02-11T13:08:00-06:00February 23rd, 2022|Change Orders, Construction Contractor Advisor, Construction Contracts|

Construction contracts typically allow for modifications during the course of performance. Parties can agree to change the scope of work or price that was originally agreed to. For example, contractors can run into unexpected costs due to another’s negligence or delays. Material costs may go up and the contract price may become inadequate. Modifications allow for contractors to be fairly compensated for the increased costs that result through no fault [...]

11 Jan, 2022

What you need to know about Indemnification Clauses

Craig Martin2021-12-30T13:46:56-06:00January 11th, 2022|Construction Contractor Advisor, Construction Contracts, Indemnity clauses|

Construction projects are risky, and parties allocate risk to reduce their own liabilities. Indemnification clauses shift risk from one party to another, but they come in may shapes and sizes. Therefore, it is important to read yours carefully. Terminology and Effect of Indemnification An “indemnitor” promises to compensate an “indemnitee” for injury or loss that the indemnitee incurs. Subcontractors are typically indemnitors that promise to “indemnify” the general contractor for [...]

28 Jul, 2021

Material Costs Continue to Rise—What’s a Contractor to do?

Craig Martin2021-07-24T09:08:33-05:00July 28th, 2021|Construction Contractor Advisor, Construction Contracts, Escalation Clause|

While COVID has made the past year wild and unpredictable, this summer could be even wilder with rapidly escalating material costs. Lumber prices have tripled, steel prices are through the roof and PVC has doubled. These increases can turn into real numbers on your projects and if you don’t have any protections in place, the project could turn ugly in a hurry. Now is the time to review your current [...]

12 May, 2021

Another Reason Not to Act As Your Own General Contractor

Craig Martin2021-05-24T14:14:56-05:00May 12th, 2021|Construction Contractor Advisor, Construction Contracts, Statute of Limitations|

The Nebraska Supreme Court recently issued an important opinion concerning the statute of limitations for a homeowners bringing claims against contractors. When an owner acts as his own builder or general contractor, he must file a lawsuit against a subcontractor within four years of the subcontractor completing its work, not within four years of completion of the total home or project. Add this to the list of reasons a homeowner [...]

28 Apr, 2021

Material Cost Increases—Are you ready?

Craig Martin2021-04-25T12:09:44-05:00April 28th, 2021|Construction Contractor Advisor, Construction Contracts, Escalation Clause|

Construction contractors are seeing material costs increase, particularly lumber, steel and fuel. As you review your contracts for 2021 and beyond, you may want to consider adding a price-escalation clause the protect against material cost increases. What is a price-escalation clause? In its simplest terms, a price-escalation clause allows contractors to recover material cost increases on a project. While triggering events for escalation clauses vary, the two most popular types [...]

7 Apr, 2021

Work Changes and Considerations

Craig Martin2021-04-08T07:25:42-05:00April 7th, 2021|Change Orders, Construction Contractor Advisor, Construction Contracts|

Changes on construction projects are inevitable, especially with the reality of projects during and after the COVID-19 pandemic. Due to this inevitability, owners should consider including contingency in the budget to deal with change orders. Accounting for legitimate changes quickly and obtaining an agreement that the payment fully resolves the issue can limit larger disputes down the road. Unresolved change orders often result in disputes that end up with legal [...]

3 Mar, 2021

Lien Waivers—Worth a Thorough Review

Craig Martin2021-02-27T08:28:10-06:00March 3rd, 2021|Construction Contractor Advisor, Construction Contracts, Lien Waiver, Nebraska Construction Law|

Throughout a project, and especially at the end, you are likely being asked to sign a lien waiver. Given the significant impact that these waivers may have on your opportunity to get paid, how closely are you reviewing lien waivers before you sign them? Here are some points to think about before your sign. Is the lien waiver conditional or unconditional? The concern here is whether the lien waiver goes [...]

17 Feb, 2021

I’m Not Getting Paid. Can I Terminate the Contract?

Craig Martin2021-02-13T12:54:55-06:00February 17th, 2021|Construction Contractor Advisor, Construction Contracts, Nebraska Construction Law, Termination|

I’d like to say that the answer is clearly yes, but that’s rarely the case with construction contracts. Ultimately, it will come down to the facts of your situation and whether the construction contract specifically allows you to pull off the job. Not Getting Paid Not getting paid is probably the most popular reason contractors terminate a construction contract. The difficulty arises when we look closely at the circumstances leading [...]

27 Jan, 2021

How to Deal with the Dreaded Pay-if-Paid Clauses

Craig Martin2021-01-26T11:22:56-06:00January 27th, 2021|Construction Contractor Advisor, Construction Contracts, Nebraska Construction Law, Pay-if-Paid|

It seems that more and more general contractors are using pay-if-paid clauses in their construction contracts. Pay-if-paid clauses are some of the most controversial and heavily negotiated clause in construction contracts. This article will explain what pay-if-paid clause is and provides some guidance on how to negotiate around these difficult clauses. A pay-if-paid clause, if properly drafted, pushes the risk of non-payment from the general contractor to you. The clause [...]

20 Jan, 2021

I’m Not Getting Paid. Can I Terminate the Contract?

Craig Martin2021-01-21T08:58:20-06:00January 20th, 2021|AIA Contracts, Breach of Contract, Construction Contractor Advisor, Construction Contracts, Nebraska Construction, Nebraska Construction Law|

I’d like to say that the answer is clearly yes, but that’s rarely the case with construction contracts. Ultimately, it will come down to the facts of your situation and whether the construction contract specifically allows you to pull off the job. Not Getting Paid Not getting paid is probably the most popular reason contractors terminate a construction contract. The difficulty arises when we look closely at the circumstances leading [...]

13 Jan, 2021

Construction Contracts–The Scope of the Work

Craig Martin2021-01-13T14:22:41-06:00January 13th, 2021|Construction Contractor Advisor, Construction Contracts, Nebraska Construction Law, Scope of Work|

Construction contracts can take on many shapes and sizes and there are several important provisions that you should review. But, the most important, in my mind, is the scope of work to be provided. Preventing Costly Overruns Ideally, the scope of work will detail, and limit, the work that is to be provided for the money that the owner is obligated to pay. We recommend that the scope of work [...]

4 Nov, 2020

Arbitration versus Litigation

Craig Martin2020-10-31T11:08:55-05:00November 4th, 2020|Arbitration, Construction Contractor Advisor, Construction Contracts, Nebraska Construction Law|

Construction contracts often contain an arbitration or litigation provision. While each forum has its advantages, a question often times overlooked is whether an arbitration provision is enforceable. Litigation is the Default Litigation is the default method of dispute resolution. This is not to say that litigation is the best way to resolve a case. But unless the contract contains an enforceable arbitration agreement, the parties will have to take their [...]

30 Sep, 2020

Change Order Best Practices—Document the Request

Craig Martin2020-09-26T11:29:24-05:00September 30th, 2020|Change Orders, Construction Contractor Advisor, Construction Contracts|

You know the situation, the project manager or superintendent just cornered you on the job site and told you that he needs some extra work. But, what you do next may very well make the difference on whether you get paid for that extra work. Document the Conversation The first thing you should do is confirm the conversation in an e-mail to the project superintendent or whomever is your point [...]

23 Sep, 2020

Should you Update your Construction Contracts after COVID?

Craig Martin2020-09-12T11:50:59-05:00September 23rd, 2020|Construction Contractor Advisor, Construction Contracts, Construction Law, COVID Construction|

There are few, if any, construction projects that were not impacted by COVID-19. Now that we have all dealt with these impacts, it’s time to look ahead and determine if your construction contracts should be updated to address these impacts. Below are some provisions that you should review to address future COVID type situations. Notice Provisions Delivery of notices is a critical obligation under construction contracts. But, what if the [...]

3 Sep, 2020

What Does it Mean to Incorporate the Prime Contract?

Craig Martin2020-09-02T07:23:53-05:00September 3rd, 2020|Construction Contractor Advisor, Construction Contracts, Nebraska Construction Law|

How often have you read that the terms of the prime contract are incorporated into the subcontract? If you read your subcontracts, you’ve probably seen that language in every contract over the last 10 years. But, what does that mean? It means you are bound by the terms of the prime contract, even if you haven’t seen it. Contract Language Most construction subcontracts incorporate the prime or upstream contact. A [...]

18 Mar, 2020

Is the Coronavirus Infecting Your Construction Schedule?

Craig Martin2020-03-27T14:16:40-05:00March 18th, 2020|Construction Claims, Construction Contractor Advisor, Construction Contracts, Construction Damages, Construction Delays, COVID Construction, COVID-19, Delay Damages|

We are all feeling the impact of the Corona virus, either because we or someone we know has been exposed or it is causing changes to our schedules. Have you given any thought about how the schedule on your project will be impacted? This could come in the way of a reduced labor force or scarcity of building materials. Perhaps it’s time to look at your contract to see how [...]

19 Feb, 2020

Do You Want to Pay your Subcontractor’s Employee’s Wages?

Craig Martin2020-02-15T10:35:53-06:00February 19th, 2020|Construction Contractor Advisor, Construction Contracts, Subcontractor|

The simple answer is “Of course not!”. But are you taking any precautions to make sure that it doesn’t happen to you? How can this happen? We’ve all heard the stories of a subcontractor that failed to pay its laborers prevailing wages on a Davis Bacon project. Typically, the Department of Labor catches this failure to properly pay employees in an audit of the project. If the subcontractor doesn’t have [...]

30 Jan, 2020

Construction Contract Basics—Schedule

Craig Martin2020-01-29T09:32:51-06:00January 30th, 2020|Construction Contractor Advisor, Construction Contracts, Nebraska Construction Law|

Last week’s post on the Las Vegas Raiders’ stadium got me thinking about scheduling language in construction contracts. Scheduling is a critically important piece of the construction contract puzzle, yet not all contracts contain firm schedules or even start dates. This may be because the general contractor wants some flexibility as to when the work will start. But, for the subcontractor, an elusive start date can wreak havoc on its [...]

22 Jan, 2020

Scheduling on Construction Projects

Craig Martin2020-01-18T12:53:43-06:00January 22nd, 2020|Construction Contractor Advisor, Construction Contracts, Delay Damages|

The schedule on construction projects is often as important as the budget. So, when I read an article that identifies significant problems with a project, but specifically notes that the general contractor says that the problems will not create any delays, I often wonder if the parties are being realistic. I also wonder whether the subcontractors will be forced to work extra time to make up the schedule. ENR recently [...]

15 Jan, 2020

Construction Contract Basics—Scope of Work

Craig Martin2020-01-11T10:37:04-06:00January 15th, 2020|Construction Contractor Advisor, Construction Contracts, Nebraska Construction Law, Scope of Work|

This year, every other blog post will address common construction contract clauses. My hope is that my readers will either find the content a good refresher or provide a new understanding of common construction clauses. Today, I’ll address the Scope of Work provision. Some contractors and construction attorneys would argue that the Scope of Work provision in the contract is the most important section because it defines what a contractor [...]

7 Jan, 2020

Terminated for Convenience—Now What?

Craig Martin2020-01-06T10:47:30-06:00January 7th, 2020|Construction Contractor Advisor, Construction Contracts, Termination|

Congratulations, you have just been awarded a big contract. You have beaten out your competition and this project will show case your company’s talents and dedication to the industry. You have mobilized your crew and you are ready to get to work. Then you get the notice from the owner that the project is canceled, and you are terminated for convenience. This is far from convenient for you, but what [...]

10 Dec, 2019

What is a “Waiver of Subrogation” in Construction Contracts?

Craig Martin2019-12-07T12:15:51-06:00December 10th, 2019|Construction Contractor Advisor, Construction Contracts, Nebraska Construction Law, Subrogation|

Waiver of Subrogation clauses are contained in nearly every form construction contract. Contractors sign them as a matter of course, but how often do you actually consider what it means to waive subrogation? In this blog, we’ll discuss what subrogation is and why it’s usually a good idea to waive it. What is Subrogation? Legally speaking, subrogation is a concept that allows an insurance company that has paid a loss [...]

14 Nov, 2019

What Can You Do to Get Paid on Your Project?

Craig Martin2019-11-13T18:47:44-06:00November 14th, 2019|Construction Contractor Advisor, Construction Contracts, Getting Paid|

Recently, I have had a number of conversations with contractors that are worried about getting paid on a project. Invariably, these contractors want to know what they can do to get what they are owed. Rarely is there an easy button to force these funds out of the owner or upstream contractor’s hands. And, a number of factors will figure into the analysis. A few things I would want to [...]

23 Oct, 2019

Construction Contracts—Considering the Long Game

Craig Martin2019-10-21T13:47:45-05:00October 23rd, 2019|Attorney Fees, Construction Contractor Advisor, Construction Contracts|

A recent case out of Maryland ruled that a subcontractor must pay a general contractor $2,500,000 for construction defects arising out of a 2004 project. Now, the case did take three years to wind its way through the courts, but would you be ready to defend even a 12-year-old claim? Would you have kept the contract and documents related to the project? Background This project involved the construction of a [...]

13 Sep, 2019

Do You Have Lien Rights under a Pay-if-Paid Contract?

Craig Martin2019-09-11T10:18:30-05:00September 13th, 2019|Construction Contractor Advisor, Construction Contracts, Construction Lien, Pay-if-Paid|

How often do you review the payment terms of a contract with an eye toward whether you are waiving lien rights under that contract? This is something you should consider if your contract contains a pay-if-paid clause. I am often times asked about the difference between a pay-when-paid and pay-if-paid clause. The real difference is that a pay-when-paid clause simply allows a contractor a reasonable amount of time by which [...]

1 Aug, 2019

Waiving Goodbye to Liquidated Damages

Craig Martin2019-08-01T09:37:40-05:00August 1st, 2019|Construction Contractor Advisor, Construction Contracts, Liquidated Damages, Nebraska Construction|

Construction contracts often contain liquidated damage provisions, requiring a contractor to pay a set amount for each day the project is delayed. But, as the Nebraska Supreme Court recently ruled, in U.S. Pipeline v Northern Natural Gas, an owner can waive liquidated damages where its actions induce the belief that the owner intended to waive liquidated damages. In this case, the parties agreed that the work would be done in [...]

19 Jul, 2019

What Is the Work?

Craig Martin2019-07-23T07:45:14-05:00July 19th, 2019|Construction Contractor Advisor, Construction Contracts|

When you review a construction contract, are you also reviewing the description of the Work that you’ll be doing? I mean, are you really looking at that section to make sure that it accurately describes what you will be doing, and perhaps more importantly, it identifies Work that you will not be doing? I recommend that you spend a few extra minutes with your contracts to make sure the Work [...]

9 Jul, 2019

Construction Project Problems–Who has to Pay for It?

Craig Martin2019-07-01T08:51:00-05:00July 9th, 2019|Construction Claims, Construction Contractor Advisor, Construction Contracts|

I often harp on the importance of having an experienced construction attorney review your construction contracts. A recent situation at Dartmouth College emphasized the importance of anticipating the unexpected when reviewing your construction contracts. Dartmouth is building a new $200 million engineering school, with a 340 vehicle underground parking garage. The first step was to dig a 70-foot-deep hole for the 160,000 square foot building. The problem is that the [...]

11 Jun, 2019

Construction Payments Held in Trust—Another Tool to Pursue Payment

Craig Martin2019-06-10T11:05:33-05:00June 11th, 2019|Construction Contractor Advisor, Construction Contracts, Trust Fund|

Construction contracts often require contractors to receive and hold payments in trust for the benefit of paying labor and materials furnished on a project. The purpose of the trust is to protect downstream contractors and suppliers from the risk of nonpayment of their claims against a financially distressed contractor. Trust Contract Provision A typical trust provision provides: All sums received by Contractor under this Contract are received by Contractor in [...]

30 May, 2019

Your Contract is a Hodgepodge of Conflicting Proposals

Craig Martin2019-05-26T19:32:25-05:00May 30th, 2019|Construction Contractor Advisor, Construction Contracts|

Ouch. That’s what a New York judge called a contract to remediate petroleum contamination at 47 gas stations. Sometimes, it’s hard to believe the contracts that get signed. In this case, Environmental Risk hired subcontractor Science Applications to remediate petroleum contamination at 47 gas stations. Environmental Risk first required its subcontractor to sign a Professional Services Master Agreement. Environmental Risk then required its subcontractor to sign three separate, but basically identical, [...]

28 May, 2019

Dinosaur Bones Discovered on Work Site—What?

Craig Martin2019-05-23T08:15:31-05:00May 28th, 2019|Construction Contractor Advisor, Construction Contracts, Delay Damages|

What if you came across dinosaur bones on the work site like they did on a project in Denver, Colorado? Would you get extra time to complete the work? What does the construction contract allow? Let’s play out that scenario. You reach out to your local construction lawyer and inform him that your project has been delayed because you came across dinosaur bones. After he stops giggling about the situation, [...]

16 May, 2019

Never Underestimate the Importance of Contract Language

Craig Martin2019-05-11T09:00:03-05:00May 16th, 2019|Construction Contractor Advisor, Construction Contracts|

A recent article in ENR described the setbacks associated with a public rail project. There are problems with the schedule, concrete quality, including precast girders , panels and rail ties, and allegations of fraud. In a nutshell--a mess. But, I wonder if there are contract provisions that address these problems. Below are some problems on the project and my thoughts on contract provisions. Schedule. The article mentions that the general [...]

7 May, 2019

Construction Material Costs are Rising–Are You Protected?

Craig Martin2019-05-06T10:19:26-05:00May 7th, 2019|Construction Contractor Advisor, Construction Contracts, Escalation Clause|

Construction material costs are rising, at least that’s what AGC, ABC, ACEC, ENR and the government are saying. So, let’s assume that its true—construction material costs are rising. What can you, as a general contractor or subcontractor do about it? Not surprisingly, it all comes down to your contract and whether you included a cost escalation clause. What is a Cost Escalation Clause? These clauses are pretty self-explanatory in [...]

23 Apr, 2019

The Risk of Conflicting Contract Provisions

Craig Martin2019-04-20T08:11:50-05:00April 23rd, 2019|Construction Contractor Advisor, Construction Contracts|

On large construction projects, with several layers of contractors, there is the risk of conflicting contract provisions. For example, the owner’s architect may use an AIA contract, the general contractor may use its own contract with the subcontractors, and some subcontractors may use their own contract with subsubcontractors. With so many contracts, there are almost certainly conflicting provisions, be it relating to indemnity, insurance and waivers of damages. It is [...]

2 Apr, 2019

Construction Contract Review—Sole Discretion

Craig Martin2019-03-28T14:06:04-05:00April 2nd, 2019|Construction Contractor Advisor, Construction Contracts|

General contractors and owners often time include language in construction contracts that provides them with sole discretion to make decisions. These provisions can severely limit a subcontractor’s ability to negotiate changes or increased pay applications. What do these phrases look like? The “sole discretion” language can take a number of forms, including: Contractor reserves the right, in its sole discretion to . . . As solely determined by Contractor ____ [...]

14 Mar, 2019

Getting Paid for Your Work

Craig Martin2019-03-14T07:38:09-05:00March 14th, 2019|Construction Contractor Advisor, Construction Contracts, Pay-if-Paid|

I’ve reviewed three construction contracts this week and all three of them contained a pay-if-paid clause. Are you signing contracts with pay-if-paid clauses? Here are some suggestions to minimize your risk with pay-if-paid clauses. What is a pay-if-paid clause? Pay-if paid clauses eliminate the general contractor’s obligation to pay subcontractors if the general contractor does not get paid. Courts reviewing these clauses have found that a subcontractor that signs a [...]

5 Jan, 2016

Your Contract is a Hodgepodge of Conflicting Proposals

Craig Martin2018-04-23T23:55:09-05:00January 5th, 2016|Construction Contractor Advisor, Construction Contracts|

Ouch. That’s what a court called a contract to remediate petroleum contamination at a number of gas stations in New York. Sometimes, it’s hard to believe the contracts that get signed. Environmental Risk hired Science Applications to remediate petroleum contamination at 47 gas stations. Environmental Risk had previously entered into a Professional Services Master Agreement with Science Applications, but also required Science Applications to sign three separate, but basically identical, subcontracts called [...]

7 Dec, 2015

Changing Course Midstream Did Not Work in River Dredging Project

Craig Martin2018-04-23T23:55:09-05:00December 7th, 2015|Construction Contractor Advisor, Construction Contracts, Government Contracting|

A contractor learned a $12M lesson when it tried to change course on a Corps of Engineer river dredging project. The case also illustrates the importance of documenting problems on a project and providing notice of those problems to the owner. In Weston/Bean Joint Venture v U.S., Weston/Bean was awarded a Corps of Engineers project to provide maintenance dredging on the Miami River to a depth of 15 feet. [...]

2 Nov, 2015

Know Your Obligations Under Both the Prime Contract and Subcontract

Craig Martin2018-04-23T23:55:09-05:00November 2nd, 2015|Construction Contractor Advisor, Construction Contracts|

A recent case out of New Mexico highlights the importance for subcontractors to review their contract with the general and the contract between the general and the owner. In Centex/Worthgroup, LLC v. Worthgroup Architects, L.P, the architect claimed that the limitation of liability clause in the prime contract trumped the provisions of the subcontract. The court disagreed and ruled that the specific provision in the subcontract controlled. In the case, [...]

30 Aug, 2015

Liquidating Agreements—Bridging the Privity Gap for Subcontractors

Craig Martin2018-04-23T23:55:10-05:00August 30th, 2015|Construction Contractor Advisor, Construction Contracts|

What is a subcontractor to do when the owner has demanded additional work, but has refused to pay for it? Typically, a subcontractor cannot sue the owner because the subcontractor doesn’t have a contract with the owner. Perhaps the subcontractor and general contractor should enter into a liquidating agreement through which the general contractor can pursue the claim on behalf of the subcontractor. Liquidating agreements bridge the privity gap between [...]

24 Aug, 2015

Flow-Down Clauses Can Drown Your Project

Craig Martin2018-04-23T23:55:10-05:00August 24th, 2015|Construction Contractor Advisor, Construction Contracts|

Flow-Down or pass-through clauses obligate downstream contractors to certain provisions contained in the up up-stream contractor contracts, such as the contract between the general contractor and the owner. These clauses are contained in every major form subcontract and they can expand the scope of your potential liability. This blog will look at typical language of a flow-down clause, what it means and how you can deal with them. [...]

3 Aug, 2015

Subcontractors Have a Duty to Clarify Ambiguities in Bid Documents

Craig Martin2018-04-23T23:55:10-05:00August 3rd, 2015|Construction Contractor Advisor, Construction Contracts|

Several months ago, I wrote about an escalator subcontractor that sued a general contractor, demanding payment for work completed based on approved shop drawings. The trial court agreed with the subcontractor, but the general contractor appealed. Ten months later, the Court of Appeals reversed, finding that the subcontractor had a duty to bring to the general contractor’s attention major discrepancies or errors they detect in the bid documents. The subcontractor [...]