To file a claim, the claimant must prove...
Entitlement: Through contract language / court proceedings by cause and effect relationship
Causation: Prove upon preponderance of evidence and facts (standard not as difficult as criminal - prove without a reasonable doubt individual is guilty)
Damages:
Claim Presentation
Validity
Enough detail to properly evaluate
Negotiate (out of court)
16 Recognized Types of Entitlement under Construction Contract Law
1. Differing Site Condition
2. Defective & Deficient Contract Documents
3. Cardinal Change
4. Directed Change
5. Constructive Change
6. Delay
7. Acceleration
8. Suspension
9. Termination
10. Implied Warranty
11. Impossibility of Performance
12. Weather
13
1. Differing Site Conditions (DSC)
Subsurface problems
Private owners deny recovery through exculpatory clauses
- Owner's representations as to anticipated subsurface conditions (soil reports)
- Differed materially from those represented
- Contractor anticipated different conditions
- Owne
2. Defective and
Deficient Contract Document
(US vs. Spearin)
US vs. Spearin
- If contractor bound to build according to plans/specs prepared by owner or A/E, contractor not responsible for defects
- Allow in bid for 'reasonable' imperfections (contingency). A/E not expected to be perfect
2. Defective and
Deficient Contract Document
Impossible Specifications
Defective Specifications:
- Error, omission, incompleteness, inadequate detail/description, conflicts, incompatible, insufficient coordination (can't be built w/ normal construction procedures)
- Large number of companies may sho
3. Cardinal Change
- Did change alter the nature of what is being constructed?
- Even if 'blizzard' co's, is not, of itself a cardinal change
- Not visible claim vehicle since cardinal change not well established by court
4. Directed Change
Owner can make changes as long as:
- Not beyond the scope of contract (cardinal change)
- Equitable adjustments to cost and schedule: Unit price (added quantities and negotiate) and Fixed price (negotiate)
5. Constructive Change
- Outside verbal/written co: same effect as if a formal co was issued
- Ordered to perform work different required under original terms of contract
- Examples: Oral work orders, not giving entitled time extensions for co's (weather > contractor must accel
6. List 4 Forms of Delay
1. Compensable
2. Excusable
3. Non-compensable
4. Concurrent delays
What is a Compensable Delay?
- Delay by another party: changes, lack of owner furnished materials, differing site conditions, engineering constraints, not processing RFI's submittals, site access
- Barrier to recovery: no damage for delays clause (once thought extinct, not enforceabl
What is an Excusable Delay?
Time extension: no money (usual weather/strikes > need to offset liquidated damages)
What is a Non-Compensable Delay?
Time or money not given to contractor (subjected to liquidated damages)
What is a Concurrent Delay?
Each party covers own losses even if one party reponsible for significantly more delay than another
7. Acceleration (Directed & Constructive)
1. Directed: order given
2. Constructive: excusable delay not given to contractor and held to schedule date for completion. Lack of response to time extension request is constructive acceleration
Linked claimed costs to acceleration: shiftwork, inefficien
8. Suspension
Owner directive to stop work: reasonable time period, contractor cannot suspend work
Contractor can stop, or alter to mitigate impacts: changes, design delays
9. Termination (Convenience & Default)
- Convenience: delay costs and profit to the point work terminated
- Default: (drastic, owner accountable) burden of proof contracto not in compliance with contract requirements. Ex: contractor will not deliver project on schedule date, not meeting specif
10. Implied Warranty
Contractual responsibility to: prevent performance of another party/hinder or delay, plans and specs sufficient/adequate, multi-prime jobs, owner coordinates contractors
Contractor argues design defective. Owner argues performance. Contractor agrees to me
11. Impossibility of Performance
Legal excuse forgiving performance
Impossible (before work commences)
Impossible (after construction started)
Contractor terminated for default: specs relief, but cost overruns
Physical Impossibility: cannot be built, ex: owner furnished equipment in too
12. Weather
- Conditions substantially different (than normal)
- Prevented from meeting schedule
- Entitled to time extension only for severe weather: days bad weather, lingering effects like soil being too wet
- Contractor compensated when owner caused delays which
13. Strikes
Excusable delay only defense against liquidated damages
- Contractor not at fault
- Owner caused strike: delay and compensation possible
- Delay cannot be concurrent with strike delay and still allow time extension
14. Owner-Furnished Items
- Delays in delivery according to specified dates
- Owner commits to date, contractor can recover even if owner tries
- Owner escape liability if no date, but owner tries to deliver items ASAP to meet contractor requirements
15. Maladministration
- Owner will not interfere with contractor's right to develop least-cost performance
- Wrongful conduct recognized as contract breawch: access/permits, scheduling, inspection delays/overzealous/give formen direction, submittals/RFI's delayed, coordination
16. Superior Knowledge
Changed conditions (soils)
Renovation work
Alternative to:
- Differing site condition claim when contract lacks this clause
Owner's Entitlement (3 things)
1. Delays
2. Deviation from specifications
3. Defective work
Owner's Entitlement: Delays
Liquidated damages for contractor delays (difficult to collect $/day late)
Consequential damages (facility not in production): loss of profit from product
Notice to contractor impact of delay: beginning of project
Liquidated damages: reasonable amount, di
Owner's Entitlement: Deviation from Specifications
Owner can obtain difference in money for fair market
Value of the as built facility vs. Value if it had been constructed as originally contracted
Owner's Entitlement: Defective Work
Owner recovers costs o completing or repairing defective work usually done by another contractor as per original specifications