Latest News

23 Jul, 2013

Are You Protecting Yourself from Rising Material Costs?

2018-04-23T23:55:17-05:00July 23rd, 2013|Construction Contractor Advisor, Construction Contracts|

The latest Engineering News Record reported that gypsum board prices rose 12.5% in 2012 and could increase 15.11% in 2013. That’s a huge increase in material costs. Are you doing anything to protect yourself? Do you have an escalation clause in your contracts? What happens if you don’t have an escalation clause? If you don’t have an escalation clause, you are either at the mercy of the contractor to allow [...]

23 May, 2013

Additional Insured versus Indemnity—What’s the Difference?

2018-04-23T23:55:18-05:00May 23rd, 2013|Construction Contractor Advisor, Construction Contracts|

Most construction contracts require downstream contractors to indemnify or insure upstream contractors.  Isn't that just a way of saying the same thing twice?  No, under Nebraska law, and most states, a duty to indemnify may be void as against public policy, while naming an upstream contractor as an additional insured will provide more certainty that the downstream contractor’s insurer will cover a claim. An indemnity clause requires one party to pay [...]

16 Apr, 2013

An RFP Is Not an Offer to Contract

2018-04-23T23:55:18-05:00April 16th, 2013|Construction Contractor Advisor, Construction Contracts|

If a general contractor uses your estimate in response to an RFP, has the general contractor promised to hire you? A recent Missouri Court of Appeals decision says no because an RFP is not an offer to contract, but an offer to receive proposals for a contract. In Jamison Electric, LLC v. Dave Orf, Inc.,  Jamison submitted a bid to general contractor Orf in support of an RFP issued by [...]

12 Apr, 2013

Venue Clauses–Are they Enforceable in Your Jurisdiction?

2018-04-23T23:55:18-05:00April 12th, 2013|Construction Contractor Advisor, Construction Contracts|

I've had a few clients ask about the enforceability of venue clauses, those pesky provisions that attempt to dictate where a lawsuit relating to the project must be brought.  As is often the case, the answer depends on the state in which the project is located.  For some variety, I reached out to some fellow construction attorneys around the country for their thoughts and I've provided their comments below.  As [...]

21 Mar, 2013

Changes to the EJCDC Construction Contracts

2018-04-23T23:55:18-05:00March 21st, 2013|Construction Contractor Advisor, Construction Contracts|

The Engineers Joint Contract Documents Committee ("EJCDC") will be issuing its latest construction contracts on March 18, 2013. These revised contracts contain significant modifications, but two major changes involve the change-order process and insurance.  Change Orders The new contracts strive to resolve conflict quickly. To expedite claim resolution, a new step has been added in which a requested change is first labeled as a change proposal, not a change. The [...]

14 Mar, 2013

Pay-if-Paid Clauses—Do you have one in your Contract?

2018-04-23T23:55:19-05:00March 14th, 2013|Construction Contractor Advisor, Construction Contracts|

I know I sound like a broken record on this, but courts keep interpreting pay-if-paid clauses. The latest case I read was out of Ohio, Transtar Electric, Inc. v. A.E.M. Electric Services Corp., in which the trial court ruled the clause was a pay-if-paid clause, but was overruled by the Court of Appeals. In that case, the subcontract conditioned payment to the sub on payment received by the contractor from [...]

14 Feb, 2013

Key Construction Contract Provisions, Part I

2013-02-14T08:00:08-06:00February 14th, 2013|Construction Contracts|

Negotiating construction contracts can sometimes seem more difficult than the work itself. Knowing what to look for can help you in your contract negotiations. While there are any number of key contract provisions, this blog will address two: indemnity and delays. Indemnity Indemnity shifts loss from one party to another. In construction contracts, the parties can agree to shift responsibility, and more often than not, the owner or up-stream contactors [...]

24 Jan, 2013

No Damage for Delay Clauses–Contractor Beware

2013-01-24T10:00:15-06:00January 24th, 2013|Construction Contracts|

Are you reviewing the first contract of the New Year yet? If you are, I hope you are looking to see whether it contains a no damage for delay provision. These provisions are enforceable in Nebraska and can turn a viable project into a disaster. What is a no-damage-for-delay provision? Generally speaking , a no damage for delay provision places the risk of loss caused by a delay on the [...]

27 Dec, 2012

A Year in Review—Know Thy Contract

2012-12-27T14:20:12-06:00December 27th, 2012|Breach of Contract, Construction Contracts|

As we wind down 2012, it’s a good time to look back and see where we've been. If the Construction Contractor Advisor had any themes beyond construction law, they were to know the terms of the contract and comply with those terms. Know Your Contract Every week I read about disputes that were caused by the parties’ differing interpretations of their obligations under a contract. These disputes often times relate to: Scope [...]

13 Nov, 2012

Understanding Your Construction Contract–Submitting a Claim

2012-11-13T08:00:53-06:00November 13th, 2012|Construction Contracts|

You know the situation--the job is not progressing as you would like, payments are slow, and now you are being challenged on your pay applications and change orders. You decide to finish the project, but you are still owed money. What do you do? Review your contract and file a claim! Pay Applications are Not Claims Although you may have submitted pay applications, pay applications are not claims under most [...]

6 Nov, 2012

Pay if Paid Clauses – What Do They Really Mean?

2012-11-06T08:00:39-06:00November 6th, 2012|Construction Contracts|

I received a number of calls about an earlier post commenting on the enforceability of pay-if-paid clauses. So, I thought I’d take the opportunity to discuss them in more detail.  What is a pay-if-paid clause? A pay-if-paid clause provides that a subcontractor will be paid only if the contractor is paid. Under these clauses, each contracting party bears the risk of loss only for its own work. In contrast, pay-when-paid [...]

1 Nov, 2012

How does Nebraska’s Prompt Pay Act Impact Your Construction Contract? Part II

2012-11-01T08:00:15-05:00November 1st, 2012|Construction Contracts|

The Prompt Pay Act, Nebraska Revised Statutes § 45-1201 to 41-1210, applies to construction contracts entered into after October 1, 2010. This is the second of two posts highlighting the key provisions of the Prompt Payment Act.  When Payments May be Withheld The Act allows a contractor to withhold payments in five situations: Retainage, as provided for in the contract, until the project is substantially completed; After substantial completion, 125% [...]

30 Oct, 2012

How Does Nebraska’s Prompt Pay Act Impact Your Construction Contract? Part I

2012-10-30T08:00:13-05:00October 30th, 2012|Construction Contracts|

Now that Nebraska’s Prompt Pay Act is in full swing, it’s a good time to consider how it will impact your rights under construction contracts. The Prompt Pay Act, Nebraska Revised Statutes § 45-1201 to 41-1210, applies to construction contracts entered into after October 1, 2010. This is the first of two posts highlighting the key provisions of the Prompt Payment Act. Impact on Public Projects The Act has clarified [...]

5 Oct, 2012

Are You Limiting Your Liability on Construction Projects?

2012-10-05T14:44:37-05:00October 5th, 2012|Construction Contracts|

Everyone wants to limit their potential liability on a construction project. But, are you actually incorporating clauses into your construction contract that do limit your liability? Limitation of liability clauses do just that, they limit the liability to which your company may be subject should a project experience problems. Typical limitation of liability clauses state that the maximum liability to which the contractor may be subject is $___________. The amount [...]

24 Jul, 2012

Forum Selection Clauses – Are You Reviewing Them?

2012-07-24T08:09:13-05:00July 24th, 2012|Construction Contracts, Forum Clause|

Construction contracts often times contain forum selection clauses, especially when the general is from out of town. Are you reviewing your contracts to see where you might have to litigate--at home or somewhere far away? What are forum selection clauses? Forum selection clauses dictate where litigation stemming from the project may be brought. Forum selection clauses may be voluntary, in that the parties to the contract consent to the jurisdiction [...]

10 Jul, 2012

Who’s Responsible for Safety on Your Job Site?

2012-07-10T07:11:16-05:00July 10th, 2012|Construction Contracts, Employee Safety|

Whether you are a general contractor or subcontractor, do you pay attention to those provisions of the contract that dictate who is responsible for the safety of your workers? If a worker is injured on the job site, the safety provisions may play a significant role in determining who is liable for the worker’s injuries. A recent Indiana Supreme Court case addressed this very issue. In that case, a concrete [...]

29 Jun, 2012

Contract Administration – Know When You Need Help

2012-06-29T14:27:02-05:00June 29th, 2012|Construction Contracts|

A client stopped by for some help with a contract. And, to this client’s credit, they knew they were dealing with a chopped up AIA contract that had so many changes, it was hard to tell what was in the original contract and what was a revision. Construction contracts, with their indemnity, subrogation, pay-if-paid clauses, can be so complicated. But, one advantage to the forms, like those from the AIA, [...]

19 Jun, 2012

Storing Key Documents, Contract Administration, Part 3,

2012-06-19T16:19:11-05:00June 19th, 2012|Construction Contracts|

As discussed in previous posts, here and here, it is vitally important for contractors to establish a contract administration system. In this post, we will discuss maintaining key documents to successfully prove your claim. In the first two posts we discussed the importance of reading and understanding the contract, and identifying the risks and theories of recovery. In the final part of this series, we will discuss some practical advice for [...]

7 Jun, 2012

Setting Up a Contract Administration System, Part II

2012-06-07T08:15:39-05:00June 7th, 2012|Construction Contracts, Construction Law, Nebraska Construction|

As promised, here are a few more necessary steps to set up a Contract Administration System. You can find the first two steps here. Today, we’ll discuss contract risks and the theories you may pursue to recover your damages, along with checklists for making common claims. Who is Responsible for the Risk? It is important to consider who is responsible for the risk associated with the project. When considering who [...]

22 May, 2012

Loss of Future Profits Can be Hard to Prove

2012-05-22T09:31:21-05:00May 22nd, 2012|Construction Contracts, Government Contracting|

Some of you may recall a recent post in which a drywall contractor was awarded loss of future profits against a union. As explained below, not all contractors are so fortunate to recover loss of future profits. In a recent matter before the Armed Services Board of Contract Appeals, a contractor claimed that it was forced to take out loans so that it could pay its subcontractors because the government delayed final [...]

17 Apr, 2012

The Joys of Litigating a Construction Claim

2012-04-17T08:32:54-05:00April 17th, 2012|Building Contracts, Construction Contracts, Construction Law, Nebraska Construction|

The Nebraska Court of Appeals recently decided a construction defect claim that illustrates the frustration that may result with taking a case to trial. After one trial and two appeals, the Court of Appeals sent the case back to the trial court to try the case a second time. And, this was over a $15,000 claim. This is one of those situations where someone is saying, “Only the attorneys got [...]

7 Mar, 2012

Notice Provisions—Are you abiding by them?

2012-03-07T08:46:35-06:00March 7th, 2012|Construction Contracts, Construction Law, Nebraska Construction|

Construction contracts often contain notice provisions that a subcontractor must follow to request additional compensation for work performed. While the notice provisions are generally straightforward, they are often one sided and a subcontractor’s failure to follow them may bar the subcontractor’s claim. A common form of change order is found in the AIA A201, which provides: Claims by either the Owner or Contractor must be initiated by written notice to [...]

9 Feb, 2012

What do you mean you won’t honor your bid?

2012-02-09T15:14:51-06:00February 9th, 2012|Construction Contracts, Construction Law, Nebraska Construction|

As a general contractor, you hate to hear that your subcontractor will not honor its bid. But, there are remedies. You may even be entitled to expectation damages – the difference between what you thought you were going to pay the old subcontractor and what you paid the new subcontractor. When a subcontractor submits a bid on which the general contractor relies in bidding a project, the general contractor may [...]

26 Jan, 2012

Your Bid May Create a Binding Contract

2012-01-26T14:16:27-06:00January 26th, 2012|AIA Contracts, Construction Contracts|

How often have you started working on a project without a signed contract? My experience has been that subcontractors do it all the time. But, what does it mean? A recent case out of Montana sheds some light on this issue. In this case, the subcontractor submitted its bid to the general contractor. The GC signed the bid on the acceptance line, but wrote in “pending contract with the owner." After the [...]

5 Jan, 2012

Government Contracting can be Difficult

2012-01-05T12:35:25-06:00January 5th, 2012|Construction Contracts, Construction Law, Government Contracting, Nebraska Construction|

Contractors often complain that while government contracts are good for business, the governmental bureaucracy is oftentimes more hassle than it is worth. A recent decision of the Boards of Contract Appeals and the Comptroller General drives this point home. In this recent situation, a service-disabled veteran-owned small business was the low bidder on a Department of Veteran Affairs project. However, the contracting officer determined that the low bid was unreasonably [...]

22 Dec, 2011

Who’s Reviewing Your Contracts?

2011-12-22T08:13:20-06:00December 22nd, 2011|Construction Contracts, Construction Law, Contract, Nebraska Construction|

I came across a Linked-In post the other day in which an attorney was asking whether he should add any extra language to an AIA agreement between the owner and contractor. This question got me wondering how  many construction companies ponder the same question. Here are some questions to think about as you wait for the holiday party to start. Should your attorney review the contracts you are signing? And, [...]

9 Nov, 2011

Wouldn’t It Be Nice to Limit Your Liability?

2011-11-09T19:21:02-06:00November 9th, 2011|Construction Contracts, Construction Law, Contract, Documentation, Limit Liability, Nebraska Construction|

Did you know that you may be able to limit your liability on a construction project? Limitation of liability provisions are enforceable in Nebraska and may provide an effective method to limit your liability. Limitation of liability clauses generally set forth the upper limit a contractor may be liable for the work it performs. These clauses often times contain language like: Contractor’s maximum liability to Owner for all damages shall [...]

26 Oct, 2011

Change Orders – Do They Really Need to Be In Writing?

2011-10-26T09:52:14-05:00October 26th, 2011|Change Orders, Construction Contracts, Construction Law, Contract|

Well, it depends. Client questions and case law abound with questions about change orders and whether they really need to be in writing. Although Nebraska courts have not dealt with the issue in a while, courts around the country have recently addressed this question and it always comes down to the specific facts involved. But, if your contract requires a change order in writing, you would be well advised to [...]

28 Sep, 2011

Is the Construction Industry Headed for a Healthy Recovery?

2011-09-28T14:42:55-05:00September 28th, 2011|Construction Contracts|

Unfortunately, it does not appear that the construction industry is headed for a turnaround, yet. Last week, the U.S. Department of Commerce, Housing and Urban Development issued a report on new residential construction through August, 2011. The report noted that housing starts were down 5 percent from last July, which is the lowest it had been in three months. And this represents less than half the number of homes that [...]

10 Aug, 2011

Can you improve your documentation system?

2011-08-10T11:26:34-05:00August 10th, 2011|Construction Contracts, Construction Law, Documentation, Limit Liability, Nebraska Construction|

Last week we blogged on documentation to support the amount of a construction lien. This, however, is just the tip of the documentation iceberg.  For those of you who have experienced construction litigation, you know the large number of documents involved in a case. And, perhaps you are familiar with the awkward feeling of not being able to locate fundamental documents, like the signed contract. A good documentation system will serve [...]

12 Jul, 2011

Getting Paid for Your Work

2011-07-12T15:13:43-05:00July 12th, 2011|Construction Contracts, Construction Law, Subcontractor|

More contractors and subcontractors are having trouble getting paid for their work.  While an owner losing financing is nothing new, subcontractors are more and more finding pay-if-paid clauses in their contracts that arguably prevent them from pursing the general contractor for payment. What can you do to minimize this risk? Read Your Contract I know this sounds obvious, but pay-if-paid clauses can get stuck deep in the contract. And, after [...]

1 Jun, 2011

Construction Contracts: Top Tips – What are the Terms?

2011-06-01T08:44:21-05:00June 1st, 2011|Construction Contracts, Construction Law, LEED, Limit Liability|

This is the first in an ongoing series discussing construction contracts. Would you ever agree to a contract without knowing the terms? Most contractors would say no, perhaps a bit more emphatically. But, it happens every day—where contract terms that you have never seen are incorporated into the contract by reference. Be on the lookout for phrases that incorporate external terms or standards to make sure you know what you [...]

24 May, 2011

Minimizing your Risk in Green Building

2011-05-24T15:22:37-05:00May 24th, 2011|Construction Contracts, Construction Law, Green Building, LEED, Limit Liability, Sustainable Building|

Green or sustainable building has become a focal point in the construction industry.  And, with sustainable building contracts come green building obligations.  Contractors and subcontractors have to make sure they understand these requirements for “green” projects.  LEED (Leadership in Energy and Environmental Design), created by the USGBC (United States Green Building Council) is the leading method for “green” certification.  The LEED rating system has a number of requirements, just a [...]

20 May, 2011

Limiting your Liability in Construction Contracts

2011-05-20T13:41:30-05:00May 20th, 2011|Construction Contracts, Construction Law, Limit Liability|

Have you ever wondered if you can limit your liability on a construction project?  Well, there are ways that this can be done.  Nebraska courts have allowed contractors to limit their liability, but only in limited circumstances.   The contract might contain a waiver of subrogation clause.  This means that if the owner’s insurer pays for damage, even if it’s caused by the contractor, the owner cannot pursue claims against [...]

2 May, 2011

Calling Contractors, Subcontractors and Builders

2011-05-02T15:23:33-05:00May 2nd, 2011|Construction Contracts, Employee Eligibility, OSHA, Public Contracts|

Welcome to Lamson, Dugan and Murray’s Construction Law blog. Here, we’ll be posting articles on a wide variety of construction related topics, including contracts, liens, dispute resolution, employee problems, insurance coverage, and updates on Nebraska and Iowa law and statutes. We hope that you find our articles beneficial to your business, and if you have a topic you’d like us to write on, drop us a line and we can [...]