Ways to Guard Against Insolvency Risks

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

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

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

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

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

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

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

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.

Managing Engineering Liability and Risk in Oregon

On February 25, 2022, my colleague Zachary Davis and I will be presenting as part of a HalfMoon Education live interactive webinar Managing Engineering Liability and Risk in Oregon. Zachary will present “Law of Engineering Malpractice,” an overview of professional liability claims. I will present “Understanding How Contracts Can Shift, Reduce (or Increase) Risk,” an overview of contract law and key concepts. Click here to learn more and to register online.

Every Construction Project Comes With Risk, but It Can Be Managed

In my latest article for the Daily Journal of Commerce, I provide a few suggestions for contractors, and perhaps project owners as well, to manage risk through a construction contract. Provisions that can be included in a contract to achieve that end might include:

  • The owner limits its potential claims to direct damages and waives claims for consequential damages.
  • The contractor’s maximum liability to the owner is capped at a stated sum.
  • The contractor’s potential liability for late performance is limited to a set amount per calendar day.
  • The contractor’s bid includes contingency to guard against unforeseen risks, or provisions to address material price escalation or “force majeure” events such as pandemics.

Read the full article here.

Originally published as an Op-Ed by the Oregon Daily Journal of Commerce on January 20, 2022.

 

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