Handling Threats of Contract Termination in the Construction Context

The threat of a contract termination, especially one “for cause” as opposed to “for convenience” , is something that strikes terror in the heart of many contractors.  The request by an owner to terminate for cause is something that must be handled carefully by the design professional/contract administrator.  A misstep by any party can cost untoward damages relating to contract termination in the construction context.


Managing Changes on the Construction Project

As sure as Santa’s arrival each year, the setting of the sun each night, and the arrival of the bowl games each December, there will be changes to a construction project.   How you manage those changes is important.  If you can properly document delays, changes in scope, or other issues, you can recoup your time and expenses.  If you fail to manage changes well, you are literally throwing money away.  And– if you are a design professional and do not have a good system in place for handling change order requests, you are almost guaranteeing a lawsuit at the end of the project.  Read more on Managing Changes on the construction Project  at this link.


Understanding the Construction Contract Before You Sign It

Construction contracts are not all alike.  Though they may familiar AIA form, for example, they often have changes, strikethroughs, and the like which can seriously alter the controlling language.  The time to read and understand your contract is before you sign it.  For a more in-depth look at this issue, refer to my article on construction contract terminology.


Holidays and downtime on the job

google lego calendarThis time of year, folks look forward to taking time off from their jobs and spending time with family.  Most of your workers, subconsultants, and vendors do, too.  Add to that that many owners may be unreachable during the holidays, and it seems that sometimes it is impossible to get anything done during December.

Despite all the festive good cheer, be careful not to let the holiday season turn into a claim for delay on a project.  Project holidays are usually set at the beginning of a job.  It is a good idea to review your contract and any set calendars agreed to prior to making assumptions about what days will be considered non-work days.  Discuss anticipated absences early in the month, and determine back-up plans for when a needed individual (for example, the architect) is not reachable.  If the owner will be unavailable, has he delegated decision making authority in his absence?  Anticipating potential problems and solutions to them can make the difference between a productive month and weeks of float creep.

If you experience problems due to the vacation of others, be sure to document the delays and timely request an extension of time.  Under AIA A201 8.3.1, the contract time shall be extended by change order  if the contractor is delayed in the progress of the Work by an act or neglect of the Owner, Architect, or a separate contractor employed by the Owner.  Contract adjustments due to the delay are also available.  Likewise, Consensus DOCS 200, at 6.3.1, contains a similar provision for compensation for delay damages caused by others.

Under EJCDC documents, however, only an extension of time, and not an equitable cost increase to the contract, is the remedy for a delay experienced by a contractor.  EJCDC C-700 12.03.

Regardless of the form of contract on your Project, be sure do document all delays experienced due to the unavailability of others.  Make claims for time and/or money adjustments in accordance with your contract for all such delays to avoid finding yourself short on time at the end of the Project.

Oh, and happy holidays!

Photo:  google lego calendar by keso s via Creative Commons license.


Welcome to the Construction Law in North Carolina Blog!

Welcome! This is the work-in-progress of Melissa Dewey Brumback, a Raleigh, North Carolina construction and business dispute attorney.  I’m a partner in the litigation department at Ragsdale Liggett, PLLC.   I will be posting articles of relevance to those in the construction industry (especially design professionals) as well as those involved in (or hoping to avoid) business disputes.

While I’m getting my feet wet here, feel free to write me a comment or visit my law firm profile.

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