Efforts Expected of a Contractor When Efforts Clauses Are in Dispute

By Tamara Boeck on May 19, 2023 Posted in Construction Contracts, Risk Management

A construction project can be delayed for a multitude of reasons. Where the cause of the delay is not force majeure, or other excusable delay by a contractor, and where the contractor has some fault, what level of actions must a contractor take to satisfy the terms “best efforts” or “reasonable efforts” or “commercially reasonable efforts” often used in the ‘efforts clause’ of a construction contract? In an article for the Daily Journal of Commerce, I look at several factors that can affect the expectations on a contractor for making good after a delay, including how the jurisdiction that governs the contract differentiates, or doesn’t, between the terms, whether the jurisdiction has concluded that “best efforts” language creates a fiduciary relationship between the parties and commensurate heightened obligation of performance by the contractor, and more. Read the full article here.

Originally published by the Daily Journal of Commerce on May 18, 2023.

Arbitration Provisions to Consider in a Proposed Design or Construction Contract

By Zachary Davis on May 19, 2023 Posted in Arbitration, Construction Contracts

The party responding to a proposed design or construction contract may satisfy itself that the contract proposes arbitration or litigation to resolve any disputes and leave it at that—as long as the method of resolution is generally aligned with the party’s preferences. In order to eliminate surprises for their clients if a dispute arises and balance efficiency with the desire for a fair process, construction and design attorneys expend much effort to understand the specifics of the proposed resolution process. In my latest column for the Daily Journal of Commerce, I outline items in a checklist I have created that I advise my clients to consider including in their arbitration provisions. Read the full article here.

Originally published by the Daily Journal of Commerce on April 20, 2023.

A Reminder for Contractors of Perils of Not Registering

By Mark Barak on March 24, 2023 Posted in Construction Industry, Washington

The requirements governing contractors performing services in Washington state are contained in Chapter 18.27 of the Revised Code of Washington, which defines who is considered a contractor and provides the registration requirements for those contractors, as well as outlining the consequences of not registering. In this article for the Daily Journal of Commerce, I discuss guidance issued recently by the Washington Supreme Court to clarify Chapter 18.27 for contractors. You can read the full column here.

Originally published as an Op-Ed by the Oregon Daily Journal of Commerce on March 16, 2023.

A New Year’s Resolution: More Consideration of Time Limits

By Karl Oles on January 30, 2023 Posted in Construction Contracts

In a world of pure cooperation, if the owner of a construction project or a contractor causes a problem, the responsible party would admit fault and make amends—rendering the negotiation of a construction contract unnecessary. In our less than ideal world, owners and contractors have adverse interests, the party at fault is not always clear, and when a dispute arises, the construction contract provides a pathway to resolve it. In my latest column for the Daily Journal of Commerce, I look at several procedural provisions in construction contracts that include some form of time limitation, such as a stipulated time for a contractor to submit a claim, and provide some suggestions for parties to ensure they comply with those limits. You can read the full column here.

Originally published as an Op-Ed by the Oregon Daily Journal of Commerce on January 19, 2023.

The Importance of Third-party Beneficiary Clauses in Contracts

By Andrew Gibson on September 22, 2022 Posted in Construction Contracts, Oregon, Risk Management, Utah, Washington

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.