Construction contracts and claims

Subscribe to Construction contracts and claims

Passed in 2010, the Massachusetts Prompt Pay Statute imposed specific requirements on owners, contractors and subcontractors of private projects over $3M with regard to submitting, processing and approving requests for payment and change orders.  A recent decision by the Massachusetts Superior Court entitled, Tocci v. IRIV Partners, LLC, et. al. has confirmed that…

Changes are made to the scope of work on construction projects every day. In some cases, the contract party being asked to accept these changes is reluctant to do so, viewing the changes to be so substantial as to result in a scope of work radically and materially different than what it originally agreed to perform. Faced with these circumstances, the decision to refuse to perform the extra work and walk away from the project can be a tempting one.

The “cardinal change doctrine” is a tool available to address these situations. The doctrine provides that, when changes are made to a contract which are so disproportionate to the original scope of a contractor’s work that they constitute an abandonment of the original agreement by the other party, the contractor is relieved of further performance obligations.
Continue Reading Connecticut Appellate Court Recognizes Cardinal Change Doctrine for the First Time

As the coronavirus/COVID-19 pandemic continues to spread and the governmental and private sectors formulate their responses, it has become apparent that the associated economic impacts will be significant and affect all sectors of the economy, including construction. Robinson+Cole’s Construction Group has been monitoring these developments and is already seeing preliminary notices being sent out by…

As the Coronavirus spreads across the globe, its impact continues to disrupt many industries, including construction.  Over the last twenty years, the construction industry in the United States has substantially increased its reliance on China as a supplier for all types of construction materials including electrical and lighting equipment, elevators and component parts, plumbing fittings…

It’s been said that as California goes, so goes the nation. If so, general contractors throughout the country may soon be taking on more responsibility for the unpaid wages of the workers on their construction projects than they might have expected. As of January 1, 2018, Assembly Bill 1701 makes general contractors liable for the unpaid wages of any employee who furnishes labor to or through the general contractor in furtherance of the prime contract; no matter the tier.

A.B. 1701 amended Section 218.7 of the California Labor Code so that general contractors on private construction projects “assume, and [are] liable for any debt” of a subcontractor of any tier for unpaid wages, fringe benefits or other employee contributions. The driving force behind the legislation was the labor unions. The legislation does not provide for a private right of action to the unpaid employees but instead permits the Commissioner of Labor to file suit on behalf of an unpaid employee(s) and also allows labor unions to sue for unpaid wages or benefits. There is a one year statute of limitations for such claims.
Continue Reading California and Maryland Have Enacted Legislation Essentially Making The General Contractor the Guarantor for All Wages on the Project – Should Sureties Be Concerned?

For years, general contractors and trade contractors have faced very strict “no damages for delay” clauses on New York State construction projects. The tides are changing.  If signed into law, S. R. 06686, Reg. Sess. 2017-2018 (NY 2017) will require public entities to allow contractors, subcontractors and suppliers to recover for costs associated with project delays to the extent the delays were caused by the entity’s actions or inactions. Public entities would include, without limitation, any state agency, department, board, bureau, municipal corporation, school district or any instrumentality or public subdivision of the State of New York.
Continue Reading Will Strict “No Damages for Delay” Clauses Be Outlawed on New York Public Construction Projects? Stay tuned.

The Supreme Judicial Court (SJC) is slated to hear oral argument in G4S Technology LLC v. Mass. Technology Park Corp. on Monday, March 5, 2017 – a case with significant implications for construction litigation.

The dispute arises out of a $45 million public works project to build a 1200-mile fiber optic network bringing high speed Internet access to western Massachusetts. Appellee Massachusetts Technology Park Corporation (MTPC), a state development agency, awarded the contract to design and build the fiber optic network to Appellant G4S Technology LLC (G4S).
Continue Reading Oral Argument Preview: G4S Technology LLC v. Mass. Technology Park Corp.

Our readers may recall that Public Act No. 15-28 was signed by the Governor back in 2015, subjecting the State of Connecticut and its political subdivisions to a statute of limitations for asserting actions and claims arising out of “construction-related work.” The law became effective as of October 1, 2017. “Construction-related work” is defined in the Act to include the design, construction, construction management, planning, construction administration, surveying, supervision, inspection or observation of construction of improvements to real property. Notably, it applies not only to the State, but also its subdivisions such as cities, towns, and other entities like school districts.

The limitations period set forth in the Act is 10 years from the date of substantial completion of a given improvement. The 10 year limitations period applies going forward to improvements to real property substantially completed on or after October 1, 2017. For improvements substantially completed before October 1, the limitations period runs to October 1, 2027. Prior to the Act, the State and its political subdivisions were generally not subject to any statutes of limitations for such claims due to the legal doctrine of nullum tempus occurrit regi, which provides that a state is not subject to statutes of limitations unless it specifically consents to be. Literally translated, it means that “no time runs against the king.”…
Continue Reading Tic Toc Tic Toc: The Clock Is Running on Construction and Design Claims by the State of Connecticut Beginning October 1, 2017

In negotiating construction contracts, the parties may ignore or give little attention to the project’s insurance requirements.  Insurance provisions are oftentimes left untouched on the standard industry forms.  One typically misunderstood type of project insurance is builders’ risk, also sometimes referred to as an “all risk” policy, or BRI.  Builders’ risk insurance is a property…

Construction projects are no stranger to delays and the inevitable resulting disputes. To allocate such risks, parties frequently include no damage for delay causes in their contracts. These provisions commonly provide that in the event of a delay the contractor’s remedy is limited to an extension of time. Given that there are often multiple causes of delays and a variety of types of delay damages it is critical that at the onset of a construction project the parties consider and properly allocate the risk of such delays and the potential resulting costs in the contract documents.

A recent Massachusetts Superior Court decision offers further insight into the importance of the contract in allocating the risk of delay damages. In Cumberland Farms, Inc. v. Tenacity Constr., Inc. (Mass.Super, 2016), the court held that the terms of the contract precluded the contractor from recovering lost productivity and costs associated with work inefficiencies incurred while performing Winter work. The case arose from two distinct construction projects involving the plaintiff Cumberland Farms, Inc. (“CFI”) as the owner and Tenacity Construction, Inc.(“Tenacity”) as the contractor. Both projects suffered severe delays. As a result CFI granted Tenacity an extension of time and agreed to pay Tenacity time and materials for costs incurred while performing work during the Winter months. Prior to performing the work Tenacity claimed that reimbursement for time and materials would likely not fully compensate Tenacity for any lost productivity or inefficiency costs incurred during the Winter and that Tenacity may seek such costs at a later date. Although CFI did not deny this request it also did not agree to the request. A couple months after completing the Winter work, Tenacity sent CFI a letter claiming that it was entitled to an equitable adjustment of the contract price for lost productivity and inefficiency costs attributable to Winter conditions. In response CFI requested back-up information in support of Tenacity’s claim but ultimately denied the request.
Continue Reading Contract Barred Recovery of Lost Productivity Damages Suffered by Contractor