Construction Contracts Archives - 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 [...]

10 Mar, 2023

Winning Isn’t Everything . . . Unless You Can Collect: The Nebraska Supreme Court’s Recent Cautionary Holding

Callie Kanthack2023-05-03T08:52:00-05:00March 10th, 2023|Construction Contractor Advisor, Latest News, Nebraska Construction Law|

Unfortunately, winning a case does not guarantee that you will collect money. The court is not responsible for collecting the judgment. Rather, if the judgment debtor (losing party) does not voluntarily pay the judgment to the judgment creditor (winning party), the judgment creditor must take action to collect. For construction cases, the issue becomes more complicated and nuanced where a construction lien is filed on real property owned by a [...]

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 [...]

25 Jan, 2022

COVID-19 and Force Majeure Clauses

Craig Martin2021-12-30T13:51:35-06:00January 25th, 2022|Construction Contractor Advisor, COVID-19, Force Majeure|

The resurgence of COVID-19 has increased the importance of force majeure clauses in construction contracts. Here are some things to consider for your force majeure clause. Effect of Force Majeure Clause Force majeure clauses seek to excuse the nonperformance of a party. A party is no longer obligated to perform when an event expressed in the force majeure clause occurs, and the event is the cause of the party’s inability [...]

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 [...]

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 [...]

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 [...]

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 [...]

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 [...]

24 Jun, 2020

Take-Out Food and the First COVID-19 Force Majeure Opinion

Craig Martin2020-06-20T11:27:32-05:00June 24th, 2020|Construction Contractor Advisor, COVID Bankruptcy, COVID-19, Force Majeure|

An Illinois bankruptcy court was the first court in the country to issue an opinion on how a force majeure clause in a commercial lease would be applied to the COVID-19 pandemic. Not surprisingly, the language of the underlying force majeure clause and the Illinois’ Governor’s executive order played critical roles in the court’s analysis. As it turned out, take-out food saved the contract. The case involved a restaurant that [...]

5 Feb, 2020

Surety Hires Terminated Contractor to Finish Project

Craig Martin2020-02-03T09:20:54-06:00February 5th, 2020|Construction Contractor Advisor, Construction Defect, Construction Surety|

Imagine a situation where the property owner finds significant problems with its contractor’s work and decides to fire the contractor. The property owner promptly informs the surety seeking a replacement contractor to finish the project. The surety investigates the situation and decides to hire the terminated contractor to finish the project. Sounds a bit odd, and certainly disappointing to the owner, but this can happen and did happen in a [...]

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 [...]

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 [...]

16 Aug, 2019

Will You Get Paid for Delays? No Damage for Delay Clauses Say No.

Craig Martin2019-08-16T14:47:48-05:00August 16th, 2019|Construction Contractor Advisor, Nebraska Construction Law, No-damage-for-delay|

No-damage-for-delay Clauses are commonplace in construction contracts. But, have you ever read one and wondered if they are enforceable? Courts across the country have consistently enforced them and these clauses will severely limit your ability to recover damages caused by delays, even if the delays were not caused by you. What is a No Damage for Delay Clause A no-damage-for-delay clause is just that, a clause that explains that if [...]

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 [...]

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 [...]