Hybrid Contracts for The Sale of Goods and Services and the Predominant Factor Test
February 15, 2021 —
David Adelstein - Florida Construction Legal UpdatesFlorida’s Uniform Commercial Code (also known as the UCC) applies to transactions for goods. “Goods” is defined by Article II of the UCC as “all things (including specially manufactured goods) which are movable at the time of identification to the contract for sale other than the money in which the price is to be paid, investment securities (chapter 678) and things in action.” Fla. Stat. s. 672.105(1).
The UCC does NOT apply to transactions for services. Transactions for services are governed by common law.
Oftentimes, transactions or contracts include BOTH goods and services. In this scenario, referred to as a hybrid contract, does the UCC or common law apply? In this scenario, courts apply the predominant factor test to determine whether the UCC or common law governs the transaction:
Whether the UCC or the common law applies to a particular hybrid contract depends on “whether the[ ] predominant factor, the [ ] thrust, the[ ] purpose [of the contract], reasonably stated, is the rendition of service, with goods incidentally involved (e.g., contract with artist for painting) or is a transaction of sale, with labor incidentally involved (e.g., installation of a water heater in a bathroom).” In such instances, the determination whether the “predominant factor” in the contract is for goods or for services is a factual inquiry unless the court can determine that the contract is exclusively for goods or services as a matter of law.
Allied Shelving & Equipment, Inc. v. National Deli, LLC, 154 So.3d 482, 484 (Fla. 3d DCA 2015) (citations omitted).
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David Adelstein, Kirwin Norris, P.A.Mr. Adelstein may be contacted at
dma@kirwinnorris.com
Don’t Kick the Claim Until the End of the Project: Timely Give Notice and Preserve Your Claims on Construction Projects
December 10, 2015 —
Christopher G. Hill – Construction Law MusingsFor this week’s Guest Post Friday, we welcome
Tara L. Chadbourn. Tara is an attorney with
ReavesColey PLLC in Chesapeake, VA, where she concentrates her practice on construction law, litigation and commercial litigation. Tara counsels owners, contractors, subcontractors and materials suppliers in various government and commercial construction matters. Tara can be reached at tara.chadbourn@reavescoley.com.
You may have experienced and have certainly heard of the scenario in which a contractor waits to address a claim as part of project closeout, only to realize the applicable deadline has already passed. While there may have been discussions about claims during the course of the project, contractors cannot rely upon oral conversations about outstanding claims. Instead, contractors must be vigilant in satisfying notice requirements and preserving claims. While entitlement must still be proven, a contractor’s chances of recovery increase greatly if the contractor abides by notice requirements and consciously preserves claims in the following ways.
Contractors Must Acquaint Themselves with Contractual Notice Provisions:
Many prime and subcontract agreements contain stringent notice provisions that require the contractor to give notice within a certain time period or else the claim is expressly waived. The deadline for notice is often only a few days after the occurrence giving rise to the claim or the contractor becoming aware of the claim. To avoid waiver, contractors must carefully review their contracts for provisions requiring notice of a claims for adjustment for a variety of situations to include unforeseen site conditions, trade sequencing changes, project delay or scope of work changes.
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Christopher G. Hill, Law Office of Christopher G. Hill, PCMr. Hill may be contacted at
chrisghill@constructionlawva.com
Best U.S. Home Sales Since 2007 Show Momentum in Housing Market
August 26, 2015 —
Sho Chandra – BloombergAmerica’s housing market has been heating up this summer.
Purchases of previously owned homes unexpectedly rose in July for a third straight month to reach the highest level since February 2007, figures from the National Association of Realtors showed Thursday. The gain was driven by stronger sales of single-family houses even as the share of first-time buyers shrank.
A limited number of available properties is keeping prices elevated, giving homeowners the financial flexibility to trade up as their housing equity improves. The data and a recent report showing the strongest rate of residential construction since 2007 are consistent with the Federal Reserve’s view that the industry is making progress.
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Sho Chandra, Bloomberg
Insurance Telematics and Usage Based Insurance Products
October 29, 2014 —
Robert Ansehl – White and Williams LLPThe New York State Department of Financial Services (the "DFS") issued Insurance Circular Letter No. 4 on May 27, 2014 (the “Circular Letter”). The purpose of the Circular Letter was to alert stakeholders of the DFS’ interest in obtaining information about products that use embedded telematic devices, including usage-based insurance products (“UBI”) that provide benefits to insurers and policyholders.
As data capture and transmission technology become more advanced, and as user interfaces become increasingly sophisticated, many insurers are considering UBI and other programs that rely upon telematic devices to monitor the behavioral patterns, tendencies and habits of insureds. For example, when these devices are installed in an insured's vehicle, a telematic device can gather driving data, including miles driven, the time of day the driver used the vehicle, and his/her speed, acceleration and braking patterns. This data can be captured and transmitted on a real-time basis that allows insurers to make more effective underwriting determinations and to better align pricing with an insured’s driving tendencies and the resulting attendant risks. Other insurers have applied UBI to homeowner’s insurance where, for example, smoke and other alarms and monitoring devices can monitor and transmit details regarding the resident's risk-based activities (for example, whether and how often and how long the insured uses ovens and stoves on an attended and unattended basis). This data can be used to facilitate an insurer’s ability to correlate insurance coverage decisions with the insured’s actual behavior (as opposed to self-reported behavior) as measured by sophisticated home-based telematic devices. In addition, UBI and other programs provide the data on a real-time basis, as opposed to collecting information via traditional means, principally based upon post-claim reporting. Tempering increased UBI usage are countervailing privacy and data protection concerns and risks. Regulators, insurers and consumers have significant stakes in the availability, access and applications of this information.
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Robert Ansehl, White and Williams LLPMr. Ansehl may be contacted at
ansehlr@whiteandwilliams.com
It’s Time to Start Planning for Implementation of OSHA’s Silica Rule
May 03, 2017 —
Nathan Owens & Louis “Dutch” Schotemeyer – Newmeyer & Dillion LLPGetting a notification from OSHA that your company is being investigated for a health or safety violation is an unwanted disruption to your business that could lead to a hefty monetary fine. Worse yet, if your company is found to have committed multiple violations, OSHA may categorize your company as a severe violator, which makes you subject to follow-up inspections. In the last 6 years, OSHA has added 520 companies to the Severe Violator Enforcement Program - sixty percent of which are in the construction industry.
New OSHA regulations impacting the construction industry may result in more companies facing investigations and fines, or worse yet, laying off workers and unable to compete for new work. In 2013, OSHA proposed a new mandate to reduce silicosis in workers. The mandate, which was revised multiple times before being made final in March 2016, requires that employers ensure their workers are exposed to no more than 50 micrograms of crystalline silica in an eight hour period (down from the current standard of 250 micrograms). Under the new mandate, employers are also held to heightened reporting requirements, protective measures and medical testing for employees with extended exposure to silica.
In the construction industry alone, OSHA believes the new mandate will prevent 1,080 cases of silicosis and more than 560 deaths. Builder and trade groups believe the new mandate will result in the loss of tens of thousands of jobs and cost the building industry billions of dollars. The National Association of Home Builders estimates that the Silica Rule will cost homebuilders $1,500 per start. While the two sides mount their arguments and seek support, how to implement the rule and its long term feasibility are still contested questions.
Recognizing the challenges employers will have with the heightened requirements of the Silica Rule, OSHA just announced that enforcement is being delayed 90 days to develop additional guidance for implementation of the rule in the construction industry. The new start date for enforcement of the Silica Rule is September 23, 2017.*
Many in the industry are hoping the Trump administration repeals the Silica Rule like they have “blacklisting” and the Volks rule. However, until that happens, OSHA expects your company to implement processes to ensure compliance by the new start date.
*The Silica Rule was adopted by Cal/OSHA in August 2016 even though Cal/OSHA’s own silica standard had been in place since 2008. Cal/OSHA adopted the federal standard with the June 23, 2017 effective date; however; in an effort to synchronize with OSHA, Cal/OSHA recently announced that the effective date in California will also be September 23, 2017.
Nathan Owens is the Las Vegas Managing Partner of Newmeyer & Dillion, and represents businesses and individuals operating in a wide array of economic sectors including real estate, construction, insurance and health care in all stages of litigation in state and federal court. For questions related to the OSHA and the Silica Rule, you can reach him at Nathan.Owens@ndlf.com.
Louis “Dutch” Schotemeyer is an associate in Newmeyer & Dillion’s Newport Beach office. Dutch’s practice concentrates on the areas of business litigation, labor and employment law, and construction litigation. For questions related to OSHA or the Silica Rule, you can reach him at Dutch.Schotemeyer@ndlf.com
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Caltrans Reviewing Airspace Program in Aftermath of I-10 Fire
July 02, 2024 —
Aileen Cho - Engineering News-RecordThe California Dept. of Transportation has indefinitely suspended approving any new leases, subleases, and renewals of open storage properties in the wake of a fire that damaged a section of Interstate 10 through downtown Los Angeles last fall.
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Aileen Cho, Engineering News-Record
Ms. Cho may be contacted at choa@enr.com
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The Jersey Shore gets Beach Prisms Designed to Reduce Erosion
January 22, 2014 —
Beverley BevenFlorez-CDJ STAFFThirty-five beach prisms manufactured by Smith-Midland Corporation have been installed along the Jersey shore in Ocean Gate, New Jersey. According to the Wall Street Journal, “The prisms protect homes, prevent erosion, and reduce impacts from natural disasters like Hurricane Sandy.” They “are made with a built-in parabolic curve that scatters waves away as spray instead of allowing them to crash up onto the vulnerable shoreline.”
Ocean Gate’s Mayor Paul J. Kennedy stated, "We've been losing beach year after year with the Nor'easters we get. So we came up with an idea that hopefully will work,” The Wall Street Journal reported.
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Coverage for Construction Defect Barred by Contractual-Liability Exclusion
July 30, 2014 —
Tred R. Eyerly – Insurance Law HawaiiRelying upon precedent from the Texas Supreme Court, the Fifth Circuit upheld the District Court's denial of coverage based upon the policy's contractual-liability exclusion. Crownover v. Mid-Continent Cas. Co., 2014 U.S. App. LEXIS 12158 (5th Cir. June. 27, 2014).
The Crownovers entered a construction contract with Arrow Development, Inc. to construct a home. Paragraph 23.1 of the contract contained a warranty-to-repair clause, which provided Arrow "would correct work . . . failing to conform to the requirements of the Contract Documents." After the work was completed, cracks began to appear in the walls and foundation of the Crownovers' home. Additional problems with the heating, ventilation, and air conditioning system caused leaking in exterior lines and air ducts inside the home.
When Arrow refused to correct the problems, the Crownovers initiated arbitration. The arbitrator found that the Crownovers had a meritorious claim for breach of the express warranty to repair contained in paragraph 23.1 of the construction contract. Damages were awarded.
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Tred R. Eyerly, Insurance Law HawaiiMr. Eyerly may be contacted at
te@hawaiilawyer.com
