Tag: Articles

May a Contractor Sue the Owner’s Lender?

When disputes arise between an owner and its lender, and the lender, for any number of reasons, stops funding a project, the question of whether the contractor can sue the lender sometimes arises. The theory often advanced is that the lender knew the contractor had started work and, if it did not intend to advance the … Continue Reading

Bankruptcy as an Event of Default – Unenforceable Contract Provisions

Contract provisions stating that either the owner or the contractor’s bankruptcy will constitute an event of default are common. A corresponding provision typically sets out the nonbreaching party’s rights in the event of default, one being the right to terminate the contract. For all practical purposes, these provisions are meaningless and unenforceable. Section 365 of the Bankruptcy … Continue Reading

Common Lien Mistakes

While the technical requirements for preparing and filing liens offer countless opportunities for mistakes, two in particular seem to predominate.┬áThe first is the failure to properly calculate the 75-day period for filing the lien.┬áThe 75-day period begins to run from the earlier of (i) the day the contractor or supplier ceased to provide labor or … Continue Reading

Terminating a Contractor for Default – Caution Is the Rule

Risks of Termination While most construction contracts permit the owner to terminate a contractor in the event of default, any owner will be well counseled to exercise such rights cautiously. The risks of termination are both practical and legal. Terminating the contractor will almost certainly result in delays. Finding a replacement contractor can be difficult, particularly if the … Continue Reading

Owner/Developer Bankruptcies – What the Contractor Can Expect

What should a contractor expect when the owner files for bankruptcy? That’s a difficult question to answer briefly. Our best advice is to see a bankruptcy attorney quickly. Bankruptcy is a highly technical area of law that few attorneys understand. It’s wholly unreasonable to expect that a nonattorney could navigate his or her way through the system.  We emphasize … Continue Reading
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