It is not unusual for a doctor to be asked to sign a contact governing his or her employment and/or ownership of a business as a doctor. The issues to consider in reviewing these contracts are many: - Med mal insurance - Staffing (nurses, assistants, etc) - Provision of medical equipment - Billing - Compensation structure - Employee versus owner - Non complete clauses - Non solicitation clauses - Scope of [...]
A Massachusetts trial court recently ruled that a Construction Manager at Risk could not sue the owner for design defects even thought the owner provided the plans and specifications for the project. This ruling is a substantial shift from the Spearin doctrine which has historically made the party providing the plans responsible for any shortcomings or problems with the plans. In the case of Coghlin Electrical Contractors, Inc. v. Gilbane [...]
Covenants not to compete are common in physician employment agreements but are they enforceable? The American Medical Association (AMA) has taken the position that physician non-compete agreements impact negatively on health care and are not in the public interest. Stopping short of completely prohibiting covenants not to compete, the AMA strongly discourages them. In line with the AMA, Colorado, Massachusetts, and Delaware have passed laws invalidating contractual provisions restricting a [...]
Every contractor has a form subcontract. But, how long has it been since you reviewed your form? Has it been cobbled together over the past few years? Like the tools in your toolbox, maybe it’s time to review your subcontractor agreement to see if it still works. Subcontracts can range from a single page to several pages and can include any number of clauses. Here are some clauses that [...]
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 [...]
You have to deal with a big mess. A recent case from the Board of Contract Appeals illustrates some problems that can occur. In CPR Restoration, LLC v. Department of Veterans Affairs, CPR performed $280,000.00 worth of restoration and cleaning services and then sought payment from the VA. The VA refused, claiming that the individual that signed the contract was not authorized to sign the contract. CPR brought a claim [...]
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 [...]
How many of your projects have gotten to the point where you think it is best to just walk off the job? I am sure you have any number of times. But, the question always turns on whether walking off the job will cost you more than the headache of completing it. A recent Texas case discussed some of the issues involved in whether to walk off the job. In [...]
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 [...]
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, [...]
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 [...]
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 [...]
These is the first in a series of blogs that will discuss the importance of creating a Contract Administration System that will help you better track your contracts and improve your chances of recovering full payment. Below are the first 2 of 10 steps to create a Contract Administration System. But first, why set up a Contract Administration System? It is becoming increasingly difficult to get owners to pay for change orders [...]
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 [...]
Do you review the payment terms in your contracts? Do they contain a Pay-if-Paid clause? Did you know that this clause can bar your claim if the owner does not pay the general contractor? Pay-if-paid clauses can be very complicated, but well worth reviewing so that you can adequately gauge your risk before you take on a project. A recent case highlights the problems that a pay-if-paid clause can cause. [...]
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 [...]
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 [...]
My trial from last week is concluded but today's post is part 2 of Kara Jermain's article discussing the parol evidence rule. My thanks to Kara for her work on this project while I was busy with trial. Last week’s article discussed the parol evidence rule. The parol evidence rule excludes outside evidence of a prior or simultaneous agreement if it is not contained in contracting parties’ final written agreement. The rule can [...]
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 [...]
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 [...]
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, [...]
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 [...]
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 [...]
Our clients are often times frustrated at the lack of clear delegation and responsibility on GREEN building projects, such as those pursuing Leadership in Energy and Environmental Design (LEED) designation. While LEED projects mandate an integrated process and seek input from all parties, there is very little guidance as to each party’s obligations. To avoid this confusion, we recommend contractors take some preliminary steps to clarify their duties and responsibilities [...]
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 [...]
I have yet to meet a client who has enjoyed being involved in a lawsuit. The cost of a large document production, the stress of sitting for depositions, and the time to prepare for trial can weigh heavily on a company and its owners. But, there are some steps that you can take to limit, if not avoid, being sued. Know the terms of the contract. You must know and [...]
The Department of Labor has increased its focus on independent contractors. Knowing whether your workers are independent contractors or employees is more important than ever. But how do you know? Regulatory authorities have identified a number of factors to determine whether your workers are independent contractors, but the primary factors are: The degree and extent or control you exercise over the worker; Whether the worker works for anyone else; Level [...]
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 [...]
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 [...]
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 [...]
