How is Negotiating a Construction Contract Like Buying a Car?
March 01, 2017 —
Christopher G. Hill – Construction Law MusingsI know, you’re probably looking for a punchline, and likely thinking something along the lines of “only a construction attorney would be sitting in his office and come up with such an analogy,” but I really do think it’s a good one.
When you are buying a car, you look for priorities. Is the color what you want? Is the motor a hybrid or a v-6? Does it have Android Auto? What is the fuel mileage? All of these things may be more or less important to you. If you can get your priorities for a price that is attractive, you will likely let some other less important items, e. g. trunk space or rear seat leg room, slide and purchase the car anyway. Furthermore, you may use these minor items as negotiating points to either get one of the priorities or a lower price. Of course the dealership will want to get its priorities, likely a sale and a profit, when negotiating and will have certain items that it won’t move on just as you have terms that you won’t move on.
Much like when you walk onto the car lot, and particularly as a subcontractor looking at a contract from a general contractor, or a GC looking at the contract from the owner of a project, a construction contract presented to you is the starting point. When looking at the contract, be sure to have some non-negotiable items in mind when taking a critical eye to the terms of that contract. Some of these terms may be more or less negotiable depending on your experience with the other party to the construction contract. For instance, striking a pay if paid clause may be less important with a paying party with whom you have a 10 year history without payment problems. On the other hand, if it is your first contract with the other party, a stricter list may be required. So, much like a dealer that you know will stand behind its cars, you may be more willing to take more “risk” in entering a construction contract with a trusted/known owner or GC.
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Christopher G. Hill, The Law Office of Christopher G. HillMr. Hill may be contacted at
chrisghill@constructionlawva.com
Just a House That Uses 90 Percent Less Energy Than Yours, That's All
August 20, 2014 —
Amelia Hennighausen – BloombergActive City, Passive House
From the tallest skyscraper to the humblest suburban abode, the buildings that we live and work in draw about 70 percent of the nation’s annual electricity. They burn more than a quarter of the natural gas the U.S. consumes every year.
They eat all that energy for a simple reason: They were designed to. But that needn’t be the case in the future.
Enter the “passive house,” a kind of super-efficient building that’s highly insulated, heated mostly by the sun and sealed air-tight. It is, in other words, an energy trap.
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Amelia Hennighausen, Bloomberg
Forget the Apple Watch. Apple’s Next Biggest Thing Isn’t for Sale
May 20, 2015 —
Garret Murai – California Construction Law BlogApple released its much anticipated Apple Watch this past month.
The Apple Watch is significant for Apple, not only because its profit and loss statement has a lot riding on it, but because it’s the company’s first foray into consumer “wearables.”
This isn’t the first time the Cupertino company has ventured into new areas, through. Since its first consumer product, the Apple I, was released in 1976, Apple has gone from personal computers – and its iterations, including, desktops, laptops and tablets – to music players, cell phones and now watches.
Today, Apple is less a computer company than a consumer electronics company, and even that doesn’t quite seem to go far enough, as it has become a lifestyle brand for many. Comparisons can be drawn to Sony during the mid-1980s when everyone aspired to a home filled with Sony televisions, Sony receivers and Sony Walkmans.
Part of Apple’s success is that it sells a lifestyle that transcends its products, in which a glossy, sophisticated minimalism and simplicity, are among its most recognizable characteristics. It goes beyond their products, and is embodied in their advertising, their online and retail stores, and their packaging. And while the Apple Watch may be Apple’s latest “big” thing, I think something even bigger is underfoot at Apple, and it’s something you can’t buy.
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Garret Murai, Wendel Rosen Black & Dean LLPMr. Murai may be contacted at
gmurai@wendel.com
Subcontractor Allowed to Sue Designer for Negligence: California Courts Chip Away at the Economic Loss Doctrine (Independent Duty Rule)
August 30, 2017 —
John P. Ahlers - Ahlers & Cressman PLLCAn architect may have to pay over $1 million to a subcontractor who was contractually obligated to rely on the designer’s plans – even though the architect was not a party to the contract.[1] That was the ruling in U.S. f/u/b/o Penn Air Control, Inc. v. Bilbro Constr. Co., Inc.[2]
The dispute involved a $7.3 million design-build contract award to Bilbro Construction (“Bilbro”) to renovate a facility for the Naval Facilities Engineering Command in Monterey, California. Bilbro hired an architect (“FPBA”) to serve as the designer of record and provide all the architectural design services. FPBA’s design team included an acoustical sub-consultant (Sparling). The general contractor (design builder) also retained Alpha Mechanical (Alpha) as the mechanical electrical and plumbing (“MEP”) design/build subcontractor. Alpha, in turn, subcontracted the MEP design to Shadpour Consulting Engineers. During the design phase of this project, Alpha’s MEP design was reviewed by FPBA, Bilbro, and Sparling at the 35, 75, and 100 percent design completion levels. Alpha demonstrated that it regularly received direct communications during design development from Sparling and FPBA, including comments, changes, and revisions. One example Alpha cited was it raised some concerns about anticipated noise level in eight rooms. Sparling made several recommendations to Alpha and Shadpour that were implemented.
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John P. Ahlers, Ahlers & Cressman PLLCMr. Ahlers may be contacted at
jahlers@ac-lawyers.com
Reference to "Man Made" Movement of Earth Corrects Ambiguity
December 20, 2012 —
TRED EYERLY, INSURANCE LAW HAWAIIIn
Pioneer Tower Owners Assn. v. State Farm Fire & Cas. Co., 12 NY3d 302 (2009), the New York Court of Appeals found an "earth movement" exclusion was ambiguous when applied to an excavation. The court now considered whether a similar exclusion, expressly made applicable to "man made" movement of earth, eliminated the ambiguity when loss was created by excavation.
Bentoria Holdings, Inc. v. Travelers Indem. Co., 2012 N.Y. LEXIS 3087 (N.Y. Oct. 25, 2012).
Plaintiff's building suffered cracks due to an excavation being conducted on the lot next door. A claim was submitted to Travelers, plaintiff's insurer. Travelers rejected the claim, relying on the earth movement exclusion.
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Tred R. Eyerly, Insurance Law Hawaii.Mr. Eyerly can be contacted at
te@hawaiilawyer.com
Allen, TX Board of Trustees Expected to Approve Stadium Repair Plans
July 30, 2014 —
Beverley BevenFlorez-CDJ STAFFConstruction plans to fix the $60 million high school football stadium in Allen, Texas, which has been closed due to cracks discovered in the structure, is expected to be approved by the Allen School Board of Trustees, reported KHOU.
The construction company and architectural firm both stated “they will cover the costs to fix everything -- which could run between $600,000 and $1 million.”
The school board plans on using “$2 million in bonds for the construction, renovation, acquisition and equipment of school facilities,” and will then seek to recover the amount of repairs “from the parties responsible for defects and/or construction problems and failures.”
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The Washington Supreme Court Rules that a Holder of a Certificate of Insurance Is Entitled to Coverage
March 09, 2020 —
Sally Kim & Kyle Silk-Eglit - Gordon & Rees Insurance Coverage Law BlogThe Washington courts have historically found that the purpose of a certificate of insurance is to advise others as to the existence of insurance, but that a certificate is not the equivalent of an insurance policy. However, the Washington State Supreme Court recently held that, under certain circumstances, an insurer may be bound by the representations that its insurance agent makes in a certificate of insurance as to the additional insured (“AI”) status of a third party. Specifically, in T-Mobile USA, Inc. v. Selective Ins. Co. of America, the Supreme Court found that where an insurance agent had erroneously indicated in a certificate of insurance that an entity was an AI under a liability policy, that entity would be considered as an AI based upon the agent’s apparent authority, despite boilerplate disclaimer language contained in the certificate. T-Mobile USA, Inc. v. Selective Ins. Co. of America, Slip. Op. No. 96500-5, 2019 WL 5076647 (Wash. Oct. 10, 2019).
In this case, Selective Insurance Company of America (“Selective”) issued a liability policy to a contractor who had been retained by T-Mobile Northeast (“T-Mobile NE”) to construct a cell tower. The policy conferred AI status to a third party if the insured-contractor had agreed in a written contract to add the third party as an AI to the policy. Under the terms of the subject construction contract, the contractor was required to name T-Mobile NE as an AI under the policy. T-Mobile NE was therefore properly considered as an AI because the contractor was required to provide AI coverage to T-Mobile NE under the terms of their contract.
However, over the course of approximately seven years, Selective’s own insurance agent issued a series of certificates of insurance that erroneously identified a different company, “T-Mobile USA”, as an AI under the policy. This was in error because there was no contractual requirement that T-Mobile USA be added as an AI. Nonetheless, the certificates stated that T-Mobile USA was an AI, and they were signed by the agent as Selective’s “authorized representative.”
Reprinted courtesy of
Sally S. Kim, Gordon & Rees and
Kyle J. Silk-Eglit, Gordon & Rees
Ms. Kim may be contacted at sallykim@grsm.com
Mr. Silk-Eglit may be contacted at ksilkeglit@grsm.com
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Homeowners Sued for Failing to Disclose Defects
December 30, 2013 —
CDJ STAFFThe Madison-St. Clair Record reports that a Wisconsin homeowner has sued the former owners of her home, alleging that they failed to disclose a defect. According to the lawsuit, David and Doris Stephens informed Jennifer Davies that a basement window well had previously leaked, but that the problem had been fixed and not recurred in three years. Ms. Davies had problems with the leaks after she moved in.
And while the window was the only defect the Stepehenses reported, Ms. Davies found problems with the home’s heating and air conditioning as well. Though she paid only $112,000 for the home, Ms. Davies is suing for $400,000 for the repairs, loss of property value, and the court fees.
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