Tag Archives: contractor

Exception to the Statute of Repose?

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Hold the phone– didn’t I just say last week that the statute of repose was basically an absolute bar to any action after 6 years?  Why, yes, yes I did.

BUT it too has exceptions!  (If you’ve learned anything from my rantings, I hope it is that there is always an exception to the rule).  In a recent Court of Appeals case, the application of the statute of repose was called into question.

In Dawson v. N.C. Dept of Environment and Natural Resources (June 15, 2010), a couple bought land only after inquiring of the Person County health department to determine that the lots perked.  Based on a 1989 letter issued by the health department stating that the lots perked, the couple bought the land.  In 2000 (that is, 11 years later!), the couple applied for building permits only to learn from DENR that the land was not suitable for building.

The couple sued DENR under a negligence theory, and DENR argued the time bar of the 6 year statute of repose.  In its decision, the court held that because the 1989 letter was not based on an improvement to real property, the statute of repose was not applicable.  The Court indicated that, had the county inspector been inspecting an existing septic system, their decision may have been different.

Moral of the story? Just because you think you have a good defense, don’t forget that there is always an exception to the rule or, rather, there are many times when the shoe looks like it fits, but it really doesn’t.  Be careful– blisters are painful!

boot

Photo “Dakota Composite Dual Toe” by Bottinex via Flickr via Creative Commons Attribution-Noncommercial-Sharealike license 

Tools in your Toolbox

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A fun link for “over the hump” day.

A light-hearted post from the “Art of Manliness” blog discusses 12 essential tools for a toolbox.  Pretty basic stuff here, but something everyone–man, woman, or college-aged child–should have access to in their home.

Read it and see if you agree, and let me know what (other than duct tape, which is a given) should be added to the list………….

tool box

Tomorrow, back to the law part of the blog when we’ll be discussing, by popular demand,  the Statute of Repose.

 

“Substantial Completion” on the Construction Project: How is it defined? (Law note)

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Substantial completion is another one of those “terms of art” that lawyers love.  What does it mean when your project is substantially complete? If you are an owner, you really are only interested in one thing: when is it done? Right? Well, not exactly.  Particularly on larger projects, there may be a big difference between when a project is substantially complete and when it is finally complete, so it’s good to know what the difference is and what your contract provides.

Substantial completion is generally a defined term in a contract, but regardless of exactly how it is defined in essence it means that the owner can use the building as intended.  It usually indicates that only minor, punch list type work remains.

In the AIA general conditions, substantial completion is defined:

 § A.9.8.1 Substantial Completion is the stage in the progress of the Work when the Work or designated portion thereof is sufficiently complete in accordance with the Contract Documents so that the Owner can occupy or use the Work or a portion thereof for its intended use.

While this is standard language found in most form contracts, it can–and should–be altered to fit any unusual circumstances you anticipate on your project.

Note that the AIA general conditions do not state that either a temporary or permanent certificate of occupancy must be issued for substantial completion to occur.  For example, in the case of an office building, once the building is able to be used for upfitting purposes by the owner it is substantially complete, even if the building is not yet able to be occupied.  This can be signficant if the owner is self-performing much of the upfit work, and the acceptable degree of finished work may be something altered by the parties at the time of contract negotiation.

Whatever the defined date of substantial completion in your contract, however, it is extremely important.  This is the date that triggers:

  • retainage release
  • the warranty period
  • determination of any actual or liquidated damages
  • the running of the statute of limitations and repose

Therefore, it is important that you read your contract and understand what the date of substantial completion will be for each of your projects.

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Photo courtesy of constructionphotographs.com.

 

Handling Threats of Contract Termination in the Construction Context

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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

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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 how to handle changes in the AIA documents here.