Cambridge Massachusetts Building Expert Directory

Recent Opinions Clarify Enforceability of Pay-if-Paid Provisions in Construction Contracts

May 29, 2023 — Patrick McKnight - The Dispute Resolver
Several recent opinions and legislative actions have brought the controversial nature of pay-if-paid provisions into focus in early 2023. Pay-if-paid provisions are contractual mechanisms designed to shift the risk of non-payment from General Contractors to lower-tier subcontractors. In other words, pay-if-paid provisions generally do not require payment to downstream subs until after the GC or Prime are themselves paid in-full by the owner. Recent developments reflect the differing approaches taken by courts when addressing pay-if-paid provisions, ranging broadly from prohibition to full enforceability. Other jurisdictions fall somewhere in the middle, viewing such provisions with varying amounts of skepticism on the grounds heir impact on smaller downstream subs is disproportionate and unfair. Pay-if-paid provisions are often contrasted against “pay-when-paid” provisions. Pay-when-paid provisions may require payment within a specified duration but remove the upstream contractor’s payment in-full as a condition precedent. The brief discussion below will not explore pay-when-paid, no damage for delay provisions, or statutory prompt payment acts. Instead, this article serves as a primer on recent legal developments related to pay-if-paid provisions exclusively. Read the court decision
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Reprinted courtesy of Patrick McKnight, Fox Rothschild LLP
Mr. McKnight may be contacted at pmcknight@foxrothschild.com

AFL-CIO Joins in $10 Billion Infrastructure Plan

June 30, 2011 — CDJ STAFF

The AFL-CIO has announced plans to generate up to $10 billion in funding for infrastructure development, training construction workers, and making buildings more energy efficient, pledging $20 million to retrofit buildings. Bloomberg News reports that union officials made the announcement in Chicago at the Clinton Global Initiative, releasing a statement from Richard Trumka, president of the union, “we, at the AFL-CIO, believe that together, with our partners in business and government, we can profitably invest significant resources to make America more competitive and energy efficient.” A foot injury prevented Mr. Trumka from attending the event.

The statement also quoted Mark Ayers, president of the Building and Construction Trades Department of the AFL-CIO, “the time is now to become intensely focused on the creation of jobs.”

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Concerns About On-the-job Safety Persist

August 13, 2019 — Joanna Masterson - Construction Executive
Nearly 40% of workers are more concerned with on-the-job safety this year than they were last year, according to a 360training.com survey of a thousand people across several manual labor-intensive industries. Additionally, a quarter of workers worry every day about getting injured because of their job. That number goes up to 27% for workers in the construction and oil industries. Slips, trips and falls were the top workplace safety concern (36%), followed by electrical hazards (13%), ergonomic problems (9%), vehicle/equipment accidents (7%) and falling objects (6%). For the construction industry specifically, electrical hazards were identified as the leading cause of concern. Reprinted courtesy of Joanna Masterson, Construction Executive, a publication of Associated Builders and Contractors. All rights reserved. Read the court decision
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Use Your Instincts when Negotiating a Construction Contract

August 07, 2018 — Christopher G. Hill - Construction Law Musings
I have often discussed the more “mechanical” aspects of contract negotiation and drafting here at Construction Law Musings. However, there is another, less objective (possibly) and more “feel” oriented aspect to construction contracting that can have as big an impact on your construction project. What am I talking about? Your instinct as a construction professional when looking the other party in the eye and getting a feel for the company or individual with whom you are contracting. Why is this so important? Firstly, and this is a truism, no matter how well drafted your construction contract is (and it should be well drafted and reviewed by an experienced construction attorney), if the other party wishes to “play games” and not honor the terms of that contract, you could still very well end up in litigation with the attendant frustration and expense. Having a great looking, well thought out and at least reasonably “fair” construction contract may make the litigation process somewhat less painful but it does not completely avoid the risk of litigation. If the other party or parties to the contract decide not to pay you or perform as they promised, you are left to enforce whatever contract you have in place. Read the court decision
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Reprinted courtesy of Christopher G. Hill, The Law Office of Christopher G. Hill
Mr. Hill may be contacted at chrisghill@constructionlawva.com

Is Construction Defect Litigation a Cause for Lack of Condos in Minneapolis?

September 17, 2015 — Beverley BevenFlorez-CDJ STAFF
According to Peter Callaghan writing for the Minn Post, while multi-family residential real estate is “hot” right now, most developers are building apartments rather than condos. Four developers spoke on the topic during Minneapolis City Council Member Lisa Goodman’s monthly “Lunch with Lisa” program. The developers stated that financing is more difficult for condos than it is for apartments, and millennials and baby boomers seem to prefer renting over buying. However, some developers stated that “the 10-year liability exposure for construction defects” was another reason to avoid condo building. However, not all developers avoid condo building in Minneapolis. Jim Stanton, owner of Shamrock Development, said that he still is building condos. Stanton declared that he “has a good relationship with his lender,” and “he hasn’t been sued a lot and has never had a suit reach court.” Read the court decision
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Sales Pickup Shows Healing U.S. Real Estate Market

June 26, 2014 — Shobhana Chandra – Bloomberg
Americans snapped up previously owned homes in May in the biggest monthly sales gain in almost three years, a sign the residential real estate market is regaining its footing after a stumble early in the year. Purchases climbed 4.9 percent, the biggest increase since August 2011, to a 4.89 million annualized rate, figures from the National Association of Realtors showed today in Washington. The level was the strongest since October. The report also showed price appreciation is slowing as more homes become available. A more balanced market, including a wider selection of properties, smaller price gains and still-low borrowing costs, may encourage more Americans to buy as employment strengthens. Improving demand will probably spur a pickup in construction, and builders such as Hovnanian Enterprises Inc. (HOV) are optimistic. Read the court decision
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Reprinted courtesy of Shobhana Chandra, Bloomberg
Ms. Chandra may be contacted at schandra1@bloomberg.net

Board of Directors Guidance When Addressing Emergency Circumstances Occasioned by the COVID-19 Pandemic

May 11, 2020 — Marc Casarino, Lori Smith & Gwenn Barney - White and Williams LLP
The COVID-19 pandemic has sent massive shockwaves throughout the global economy. This crises requires business leaders to confront a host of deleterious effects on an emergency basis – the likes of which many companies have never experienced. Boards of directors must remain cognizant of their oversight responsibilities in these trying times. This post offers guidance to directors of Delaware companies for addressing emergency circumstances occasioned by the COVID-19 pandemic. Board Oversight – Lessons from Marchand V. Barnhill Directors should consider the lessons learned from the recent Delaware Supreme Court case Marchand v. Barnhill, a ruling we addressed in a previous blog post, when considering board oversight during the COVID-19 pandemic. Marchand centered on a lawsuit brought by shareholders in an ice cream manufacturing company against the company’s board of directors. The shareholders claimed that the directors violated their duty of loyalty[1] to the company when they failed to provide sufficient oversight and compliance-monitoring during a listeria outbreak that led the company to recall all products, temporarily cease product production at all plants and lay off more than one-third of the company’s workforce. Reprinted courtesy of White and Williams LLP attorneys Marc Casarino, Lori Smith and Gwenn Barney Mr. Casarino may be contacted at casarinom@whiteandwilliams.com Ms. Smith may be contacted at smithl@whiteandwilliams.com Ms. Barney may be contacted at Barneyg@whiteandwilliams.com Read the court decision
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The Case For Designers Shouldering More Legal Responsibility

November 21, 2018 — Richard Korman - Engineering News-Record
Ujjval Vyas is dignified, articulate and persistent. In past years he earned a law degree and a PhD where his thesis concerned Philip Johnson and architectural modernism. He is a founder of a hydrogen energy company. He is also leading a crusade, largely by himself, advocating that designers should be held to a "clients come first" approach applied to other professionals—an idea that would burden engineers and architects with the weight of vastly increased legal liability. The reactions to his ideas in the past have ranged from scornful to sympathetic. Read the court decision
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Reprinted courtesy of Richard Korman, ENR
Mr. Korman may be contacted at kormanr@enr.com

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