Construction contracts generally outline when and how contractors should notify parties about potential claims for additional compensation and/or time. These provisions are intended to provide project stakeholders with the information necessary to address unforeseen circumstances and streamline claim resolutions within the project rather than resorting to legal actions. However, in some cases, the contract provisions
Beware of ‘Standard’ Construction Contract Terms; Nothing Is ‘Standard’
In their focus on starting a construction project, developers, designers, and contractors can fall prey to unintended consequences arising from their deferral to and use of an “industry standard” contract form—as opposed to taking the time to precisely tailor the contract to the project’s needs and risks. In my latest article for the Daily Journal
New Washington Law Applies Limitations to Retainage on Private Construction Projects
In the construction industry, “retainage”—the practice of withholding by an owner or contractor a portion of the funds that are due to a contractor or subcontractor for a construction project until its completion—is a term frequently negotiated in contracts for private construction projects as a means to mitigate the risk of default since the monies
Preconstruction Services, Project Savings, and Great Expectations
Many standard construction contracts include a placeholder for incentives for a contractor that completes a new project on time and under budget. Possible rewards include early completion bonuses and/or sharing in the project savings, if any, which can be calculated in several ways. In my latest article for the Daily Journal of Commerce, I
Can AI Be Trusted to Draft a Construction Contract?
As alluring as it may be to enlist the help of an artificial intelligence (AI) chatbot, such as ChatGPT, to prepare a construction contract, even the chatbot will advise against using AI to do so, saying it is “highly recommended to hire a construction attorney rather than relying solely on ChatGPT or any AI model
Arbitration Provisions to Consider in a Proposed Design or Construction Contract
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
Efforts Expected of a Contractor When Efforts Clauses Are in Dispute
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
A New Year’s Resolution: More Consideration of Time Limits
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
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
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