The Importance of Third-party Beneficiary Clauses in Contracts

For anyone building a dream vacation home, renovating an existing commercial structure, or developing a multimillion-dollar, mixed-use project, construction contract terms are of utmost importance. One often overlooked clause covers the contractual “third-party beneficiary” (TBP)—a person or entity who, though not a party to the contract, stands to benefit from the contract’s performance. Interpretations of the TBP clause vary widely from state to state, and in my latest column for the Daily Journal of Commerce, I look at some of the nuances of the clause as it appears in construction contracts and how the clause is interpreted in Oregon, Washington and Utah. You can read the full column here.

Originally published as an Op-Ed by the Oregon Daily Journal of Commerce on September 15, 2022.

Considerations for Contesting a Frivolous Lien in Washington

By Bart Reed on September 2, 2022 Posted in Construction Liens, Washington

For any owner or developer of a private construction project—and especially those looking to refinance or sell the property—lien claims can pose serious challenges as well as being a source of great frustration. In my latest column for the Daily Journal of Commerce, I outline some legal options for a Washington construction project owner caught in a situation in which the owner cannot count on its prime contractor to ensure the prompt release of a subcontractor’s or supplier’s lien claim. You can read the full article here.

Originally published as an Op-Ed by the Oregon Daily Journal of Commerce on August 18, 2022.

Ways to Guard Against Insolvency Risks

By Colm Nelson on July 19, 2022 Posted in Construction Industry, Risk Management

The looming threat of a recession in the U.S. should serve as reminder to members of the construction industry that insolvency risks are real and need to be kept top of mind when moving forward with new construction projects. In my latest article for the Daily Journal of Commerce, I look at several options available to project owners and contractors to mitigate the risk of insolvency, including to obtain performance or payment bonds, structure payments based on the contractor hitting milestones throughout the project, and acquire subcontractor default insurance. You can read the full article here.

Originally published as an Op-Ed by the Oregon Daily Journal of Commerce on July 14, 2022.

Inflation: The Elephant in a Construction Dispute or Contract Negotiation

By Mario Nicholas on June 23, 2022 Posted in Construction Industry, Risk Management

Inflation has spared no part of the U.S. economy, but the construction market in particular is feeling its effects, and it is crucial that owners , contractors, and design professionals be cognizant of the risks presented by inflation and aware of and understand the options to mitigate them. In my latest column for the Daily Journal of Commerce, I answer the following questions construction industry professionals may have regarding mitigating the risks arising from inflation:

Where does my contract address inflation?
Can I recover damages specifically for inflation?
Does prejudgment interest compensate for inflation?

You can read the full article here.

Originally published as an Op-Ed by the Oregon Daily Journal of Commerce on June 16, 2022.

War-fueled Construction Cost Increases May Warrant Look at Force Majeure

By Evan Brown on June 14, 2022 Posted in Acts of God, Commercial Construction Contracts, Construction Industry

In the wake of the Russian invasion of Ukraine and economic sanctions imposed by countries around the world in response, supply chain disruptions and the resulting scarcity of construction have resulted in price escalation that threatens construction project budgets. To allocate the risk of these sorts of cost increases, project owners and contractors may use targeted contract provisions like material price escalation clauses. But more common is the “force majeure” clause, which generally addresses the assignment of risk due to unforeseeable events beyond the parties’ control. In my first column for the Daily Journal of Commerce, I explore some of the considerations for owners and contractors assessing whether war-driven cost increases may qualify as force majeure events. You can read the full article here.

Originally published as an Op-Ed by the Oregon Daily Journal of Commerce on May 19, 2022.

Construction Law Updates, Public Works Issues, and Judicial Perspectives on Litigation in an Evolving Courtroom

By Bart Reed on May 9, 2022 Posted in Construction Industry, General, Washington

On June 10, I will be co-chairing and my colleague Colm Nelson will be a panelist during the annual mid-year WSBA Construction Law Section CLE. This program is a full-day webinar presented by the WSBA in partnership with Stoel Rives and will cover construction law updates, public works issues, and judicial perspectives on litigation in an evolving courtroom. Colm, the chair of the Construction Law Section, will be on the panel “Notice and Termination Issues” and will also provide a section update. Other topics to be covered include:

One-hour ethics discussion
Annual Washington construction-related case law and legislative updates
Discussion of bid and proposal protests and litigation
Judicial panel perspectives on how trial and appellate practice continue to evolve in response to COVID
UCC applications to construction projects
COVID-19 impacts on the construction industry and workforce
Developments in Design Build and GCCM contracting

You can find out more about the event here and register at this link. CLE credits are available.

Looking Back — and Ahead — After Two Years of a Pandemic

By Zachary Davis on May 5, 2022 Posted in Construction Industry, COVID-19, General

In my column for the Daily Journal of Commerce from two years ago, I wrote that proceeding with ongoing or planned construction was not without impact or risk tied to COVID-19, and I provided a checklist for owners, designers and contractors to help them decide whether to continue a project or start a new one given the circumstances. A year later, I noted the vastly increased amount of time I was spending working on force majeure provisions in construction or design contracts. In my latest column, I look at the impacts supply chain issues, labor shortages and inflation, as well as the conflict in Ukraine, are having within the construction industry. You can read the full article here.

Originally published as an Op-Ed by the Oregon Daily Journal of Commerce on April 14, 2022.

Construction Project Scheduling & Delay Claims CLE — Seattle

By Mary DeVuono Englund on April 22, 2022 Posted in Construction Claims, Washington

On May 6, 2022, I will be presenting as part of The Seminar Group CLE seminar Construction Project Scheduling & Delay Claims, which you can attend in Seattle or online. Intended for architects, attorneys, contractors, engineers, and municipal and government employees, the seminar will cover critical-path schedule and delay concepts and legal concepts and strategies for addressing schedule delay, disruption, and acceleration claims.

I will be discussing several projects as case study examples of:

Strategies for addressing delay — from project planning to dispute resolution
Approaches to reduce delay in the planning phase
How to know when one contract method is more efficient than another
How to use contract provisions to address delay
Understanding delay claim issues and how to resolve them

Click here to learn more and to register. You get $100 off by using the faculty discount code: FAC100

Another Risk Management Tool for Private Owners in a Volatile Construction Market

By Tamara Boeck on March 25, 2022 Posted in Construction Industry, Risk Management

Traditionally, private owners of construction projects have not considered bonds — either payment or performance bonds by the general contractor — because of the additional cost and because they felt confident that the contractors and their subcontractors, suppliers and vendors on their projects would meet the obligations of the contract terms. However, in today’s volatile market, with the uncertainty introduced by understaffed contractors and subcontractors due to labor shortages, unskilled labor, supply chain failures, unchecked inflation, and other factors, owners have reason to question that sense of confidence. In my latest column for the Daily Journal of Commerce, I offer some suggestions, and caveats, for private owners to consider in using performance bonds to manage their risk. Read the full article here.

Originally published as an Op-Ed by the Oregon Daily Journal of Commerce on March 16, 2022.

How to Know When Bidding Practices Cross the Line

By Sean Gay on February 22, 2022 Posted in Bids/Bid Protests

An unfortunate side effect of growing economic stimulus and infrastructure spending is an environment that encourages unethical and illegal bidding practices. In my latest article for the Daily Journal of Commerce, I look at several categories of such practices and provide some strategies for firms to reduce their prevalence. Read the full article here.

Originally published as an Op-Ed by the Oregon Daily Journal of Commerce on February 18, 2022.