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9780471390909

Smith, Currie & Hancock LLP's Common Sense Construction Law : A Practical Guide for the Construction Professional, 2nd Edition

by ; ; ;
  • ISBN13:

    9780471390909

  • ISBN10:

    0471390909

  • Edition: 2nd
  • Format: Hardcover
  • Copyright: 2001-01-01
  • Publisher: Wiley
  • Purchase Benefits
List Price: $85.00

Summary

Construction law is an extremely confusing element and a constant concern of any construction or contracting firm.

Table of Contents

Preface xxv
Smith, Currie & Hancock LLP---A Firm Concentrating Its Practice in Construction Law, Labor and Employment Law, and Government Contracts xxvii
Bidding on the Contract
1(33)
Introduction
1(1)
General Considerations in Bidding on Public Contracts
1(1)
Award to the ``Low Bidder''
1(2)
The ``Responsible'' Bidder
3(2)
The ``Responsive'' Bidder
5(5)
General Considerations in Bidding on Private Contracts
10(1)
Contractor Bid Mistakes
10(1)
Elements for Relief from a Bid Mistake
11(2)
Owner's Duty If Bid Mistake Is Suspected
13(1)
Withdrawal versus Reformation of Mistake in Bid
14(1)
Bid Protests
15(1)
Protest on a Federal Project
16(1)
Protests to the GAO (Comptroller General)
16(3)
Protests to the Contracting Agency
19(2)
Bid Protests in Court
21(2)
Bid Protests on State and Local Contracts
23(1)
Bid Bonds
23(2)
``Bid Shopping'' and the Obligation of the Prime Contractor to the Subcontractor with the Lowest Price
25(2)
Holding Subcontractors to Their Bids to Prime Contractors
27(1)
Doctrine of Promissory Estoppel
28(1)
Elements of the Doctrine of Promissory Estoppel
29(1)
Clear and Definite Offer
29(1)
Subcontractor Expects Reliance
30(1)
General Contractor's Reliance Is Reasonable
30(1)
Problems with the Statute of Frauds
31(1)
Damages
31(3)
Points to Remember
32(2)
Interpreting the Contract
34(11)
The Importance of Contract Interpretation
34(1)
What Is a ``Contract''?
34(1)
The Goal of Contract Interpretation
35(1)
Defining Contract Terms
35(1)
Terms Defined by the Parties
35(1)
Technical Terms
36(1)
Generally Accepted Definitions
36(1)
Interpreting the Language of the Contract
36(1)
The Contract Must Be Considered as a Whole
36(1)
Order of Precedence
36(1)
The Facts and Circumstances Surrounding Contract Formation
37(1)
Discussions and Conduct
37(1)
The Parties' Prior Dealings
38(1)
Custom and Usages in the Industry
39(1)
Resolving Ambiguities
39(1)
Construction against the Drafter
40(1)
Duty to Request Clarification
40(1)
Implied Contract Obligations
41(1)
Duty to Cooperate
41(1)
Warranty of Plans and Specifications
42(3)
Points to Rememeber
44(1)
The Uniform Commercial Code and the Construction Industry
45(15)
The Uniform Commercial Code
45(1)
Applicability of the UCC to Construction
45(2)
Modifying UCC Obligations
47(1)
Contract Formation under the UCC
47(1)
Total Agreement on All Terms and Conditions Is Not Required
47(1)
The Requirement for a Written Contract
48(1)
Withdrawal of an Offer
48(1)
Filling Gaps in Essential Contract Terms
49(1)
Warranties under the UCC
50(1)
Warranty Disclaimers
50(1)
Statute of Limitations and Commencement of the Warranty Period
51(1)
Dealing with the Other Party's Insolvency
52(1)
Risk of Loss
53(1)
Inspection of the Goods
54(1)
Rejection of Goods
55(1)
Acceptance and Notice of Breach
55(1)
Anticipatory Repudiation/Adequate Assurance of Performance
56(1)
Excuse of Seller's Performance by Failure of Presupposed Conditions
57(1)
Buyer's Remedies
58(1)
Seller's Remedies
58(2)
Points to Remember
59(1)
The Authority and Responsibility of the Architect/Engineer
60(29)
Standard of Care and Professional Responsibility
60(2)
The Authority of the Design Professional
62(1)
Actual Authority
62(1)
Implied Authority
63(1)
Apparent Authority
63(2)
Ratification of the Design Professional's Agency Authority
65(1)
Supervisory and Administrative Functions of the Design Professional
65(1)
Interpretation of the Plans and Specifications
66(2)
Review and Approval of Shop Drawings and Submittals
68(2)
Inspection
70(3)
Issuance of Certificates of Progress or Certificates of Completion
73(2)
Resolution of Disputes between the Owner and the Contractor
75(2)
Other Duties of the Design Professional
77(1)
The Design Professional's Liability to the Contractor
78(1)
Negligence and the ``Economic Loss Rule''
78(3)
Intentional Torts
81(1)
Third-Party-Beneficiary Theory
82(1)
Statutes of Respose
83(1)
Assumption of Design Liability by the Contractor
84(5)
Points to Remember
87(2)
Subcontract Administration and Dispute Avoidance
89(34)
Dispute Avoidance Begins at the Bidding Stage
89(1)
The Importance of the Low Price
89(1)
Know with Whom You Are Dealing
90(1)
Reputation
90(1)
Financial Resources
90(1)
Experience and Qualifications
91(1)
Union versus Nonunion Status
91(1)
Problem Areas in Subcontract Bidding
92(1)
Enforcement of Subcontractor Bids
93(1)
Subcontractor Rights against the Prime Contractor
93(1)
Preparation of the Subcontract Agreement
94(1)
``Flow-Down'' Obligations
95(1)
Scope of the Work
95(2)
Payment Obligations
97(1)
The Case against the Paid-When-Paid Clause
97(1)
The Case for the Paid-When-Paid Clause
98(2)
Changes to the Payment Terms Must Also Account for the Surety
100(1)
Subcontractor Default Clause
100(1)
The Right to Terminate
100(1)
The AIA Documents
100(1)
Implied Termination Rights
101(1)
Alternatives to Termination
101(1)
Termination for Convenience
101(1)
Consequences of Improper Termination
101(1)
Termination for Convenience Clauses
101(1)
Limits to Termination for Convenience Rights
102(1)
Considerations in Drafting Subcontract Default Clause
102(2)
No Damages for Delay, Except as Paid by the Owner
104(1)
Changes
104(2)
Subcontractor's Indemnification of the Contractor
106(2)
Labor Affiliation
108(1)
Disputes Procedures
109(1)
Arbitration Considerations
109(1)
Disputes Clause Checklist
109(2)
Federal Government Projects
111(1)
Should Subcontractors Be Bonded?
111(2)
Dispute Avoidance by Diligent Project Administration
113(1)
General Contractor's Duty to Coordinate the Work
113(1)
Implied Duty to Cooperate
113(1)
Implied Duty to Coordinate
114(1)
Limitation of Liability
114(1)
Pay Applications and Partial Lien Waivers
115(1)
Prime Contractor Financing of Subcontractors
116(1)
Remedies for Defective Performance
116(1)
Remedies for Delayed Performance
117(1)
Relationship between Subcontractor and the Owner---May the Prime Contractor Assert the Subcontractor's Rights against the Owner?
118(1)
The Prime Must Be Liable to the Subcontractor for the Pass-Through Claim---The Severin Rule
119(1)
States Have Adopted the Severin Rule
120(1)
Conclusion
120(3)
Points to Remember
121(2)
Contract Changes
123(19)
What Is a Changes Clause?
123(1)
Recovery under the Changes Clause
124(1)
Is There Changed or Extra Work?
125(1)
Who Is Authorized to Order Changes?
126(1)
Implied Authority
127(1)
Apparent Authority
127(1)
Ratification by the Owner
128(1)
Summary
128(1)
When Are Written Change Orders Required for Extra Work?
128(3)
When Is Written Notice of a Claim for Additional Compensation Resulting from Extra Work Required?
131(1)
``Constructive Changes''
132(1)
Defective Plans and Specifications
133(1)
Misinterpretation of Plans and Specifications by the Owner
134(1)
Acceleration
135(1)
``Cardinal Changes''
136(2)
Impact Costs for Numerous Changes Made During the Project
138(1)
Impossibility/Impracticability
139(3)
Points to Remember
141(1)
Differing Site Conditions
142(21)
Differing Site Condition Defined
142(1)
Responsibility for Differing Site Conditions
142(1)
Standard Differing Site Conditions Clauses
143(1)
Federal Government
144(1)
Other Standard Forms
144(3)
Types of Conditions Covered
147(1)
Type I and Type II Changed Conditions
147(1)
Notice Requirements
147(1)
Operation of the Differing Site Conditions Clause
148(1)
Recovery for a Type I Changed Condition
148(3)
Recovery for a Type II Changed Condition
151(3)
Stumbling Blocks to Recovery
154(1)
Site Investigations
154(1)
Exculpatory Clauses
155(1)
Notice Requirements
156(1)
Record-Keeping Requirements: Proving Damages
157(1)
Relief in the Absence of a Contract Provision
158(1)
Misrepresentation
158(1)
Duty to Disclose
159(1)
Breach of Implied Warranty
160(1)
Mutual Mistake
160(3)
Points to Remember
160(3)
Delays
163(18)
The Nature of Delay Claims
163(1)
Contract Time
164(1)
Time Is of the Essence
164(1)
Contract Commencement and Completion Date(s)
164(1)
Substantial Completion
165(1)
Excusable Delays versus Nonexcusable Delays
165(1)
Excusable Delays
165(1)
Compensable Excusable Delays
166(1)
Typical Causes of Delay
166(1)
Compensable Delays
166(1)
Defective Drawings or Specifications
166(1)
Failure to Provide Access
167(1)
Improper Site Preparation
167(1)
Failure to Supply Materials or Labor
167(1)
Failure to Provide Plans/Approve Shop Drawings
167(1)
Failure to Coordinate Prime Contractors
168(1)
Failure to Give Timely Orders for Work
168(1)
Failure to Make Timely Payments to Contractors
168(1)
Failure to Inspect
168(1)
Suspensions
168(1)
Excessive Change Orders
169(1)
Failure to Accept Completed Work
169(1)
Acceleration
169(1)
Noncompensable Excusable Delays
170(1)
Weather
170(1)
Acts of God
170(1)
Labor Problems
170(1)
Concurrent Delay
171(1)
Early View---No Recovery by Either Party
171(1)
Modern Trend---Apportionment of Delay Damages
171(1)
The Claims Process
172(1)
Contractual Prerequisites
172(1)
Requirement of Notice
172(1)
Rights and Remedies
172(1)
Extra Time
172(1)
Delay Damages
173(1)
No-Damages-for-Delay Clauses
173(1)
Contractor Damages
174(1)
Owner Damages
175(1)
Delay Claims Analyses
176(5)
Points to Remember
177(4)
Inspection, Acceptance, and Warranties
181(21)
Inspection
182(1)
Introduction
182(1)
Standard Inspection Clauses
182(2)
Costs of Inspection
184(1)
The Owner's Right to Inspect
184(1)
The Right, Not the Duty
184(1)
Scope of Inspection
185(1)
Rejection and Correction
186(1)
Limitation on Owner's Inspections
187(1)
Authority
187(1)
Higher Standards of Performance
188(1)
Rejecting Acceptable Work
188(1)
Delay and Disruption
189(1)
Inspection by the Architect/Engineer/Inspector
190(1)
Inspection by the Contractor
191(1)
Acceptance
192(1)
Generally
192(1)
Types of Acceptance: Formal versus Constructive
192(2)
Authority as an Element of Constructive Acceptance
194(1)
Limitations on the Finality of Acceptance
194(1)
Contract Provisions Related to the Finality of Acceptance
195(1)
Substantial Completion
196(1)
Contractual Warranties
197(1)
Express Warranties
197(1)
Implied Warranties
198(1)
The Owner's Warranty of the Adequacy of the Plans and Specifications
198(1)
Contractor's Implied Warranties
199(3)
Points to Remember
199(3)
Management Techniques to Avoid Disputes
202(33)
The Ever-Present Risk of Disputes in Construction
202(1)
Involving Reputable and Reliable Participants in the Project
202(3)
Defining Rights, Responsibilities, and Risks: The Parties and Their Contracts
205(1)
Contract Framework
205(1)
Standard Contract Forms and Key Contract Provisions
206(1)
Avoiding and Preparing for Disputes through Proper Management and Documentation
207(1)
Prudent and Responsible Estimating
207(1)
Establishing Standard Operating Procedures
208(1)
Establishing Lines of Communication
208(1)
Project Documentation
209(4)
Cost-Accounting Records
213(1)
Monitoring the Work through Scheduling
214(1)
Conclusion
215(20)
Points to Remember
215(2)
Appendix
217(18)
Payment Bond Claims
235(11)
Payment Bond Claims
235(1)
When Payment Bonds Are Required by Statute
235(2)
Who May Claim under a Payment Bond
237(2)
What Work Qualifies for Payment Bond Coverage
239(2)
Recovery under Payment Bonds for Extra Work or Delay Costs
241(1)
The Effect of Payment Bonds on Lien Rights
242(1)
The Surety's Defenses to Payment Bond Liability
242(1)
Time of Notice
243(1)
Time of Lawsuit
243(1)
Misrepresented Status of Payments
244(2)
Points to Remember
245(1)
Performance Bonds and Termination
246(22)
Performance Bonds
247(1)
Fundamentals of Suretyship
247(1)
Performance Bonds Are Not Insurance Policies
247(1)
Indemnification---The Bottom Line
248(1)
``Common Law'' versus ``Statutory'' Bonds
248(1)
The Surety's Obligations
249(1)
Extension of Performance Bond Surety's Liability to Third Parties
249(1)
Increase of the Surety's Liability under a Performance Bond
250(2)
The Surety's Defenses to Performance Bond Liability
252(2)
Surety Entitlement to Contract Funds
254(1)
The Effect on the Surety of Arbitration of Construction Disputes
255(1)
Terminations
256(1)
Overview
256(1)
Termination for Default
256(2)
Grounds for Default Termination
258(1)
Refusal or Failure to Prosecute the Work
258(1)
Failure to Complete on Time
258(1)
Repudiation by Contractor
259(1)
Failure to Comply with Other Provisions of the Contract
260(1)
Defenses of the Contractor
260(1)
Excusable Delay
260(1)
Waiver by the Owner
260(1)
Contractor Response to Termination Notices
261(2)
Remedies of the Owner
263(1)
Reprocurement Costs
263(1)
Delay Damages
264(1)
Termination for Convenience
264(1)
Convenience Termination Costs
265(3)
Points to Remember
266(2)
Proving Costs and Damages
268(23)
Basic Damage Principles
268(1)
The Compensatory Nature of Damages
268(1)
Categories of Damages
269(1)
Direct Damages
269(1)
Consequential Damages
269(2)
Punitive Damages
271(1)
Causation
271(1)
Cost-Accounting Records
272(1)
Mitigation of Damages
272(1)
Betterment
272(1)
Methods of Pricing Claims
273(1)
The Total Cost Method
273(1)
Segregated Cost Method
274(1)
The Modified Total Cost Method
275(1)
Quantum Meruit Claims
275(1)
The Contractor's Damages
276(1)
Contract Changes and Extras
276(1)
Wrongful Termination or Abandonment
277(1)
Owner-Caused Delay and Disruption
278(2)
Owner-Caused Acceleration
280(1)
Defective Drawings or Specifications
281(1)
Inefficiency Claims
281(2)
The Owner's Damages
283(1)
Direct Damages
283(2)
Consequential Damages
285(1)
Liquidated Damages
286(5)
Points to Remember
289(2)
Resolution of Construction Disputes
291(20)
Early Claim Recognition and Preparation
291(1)
Early Involvement of Experts and Attorneys
292(2)
The Use of Demonstrative Evidence
294(1)
The Components of a Well-Prepared Claim Document
295(2)
Importance of Calculating and Proving Damages
297(1)
Pursuing Negotiation and Settlement
297(1)
Alternative Dispute Resolution
298(1)
Mediation
298(1)
The Arbitration Alternative
299(1)
Time and Costs of Arbitration
299(1)
Selection of Arbitrators
300(1)
Informality and Limited Appeals in Arbitration
301(1)
Enforceability of Agreements to Arbitrate
301(1)
Special Problems Involving Multiple Parties
302(1)
Med/Arb
303(1)
Other Forms of ADR: The Mini-Trial, Summary Jury Trial, and Dispute-Resolution Boards
303(1)
Litigation
304(1)
Profile of the Construction Trial
304(1)
The Court System
305(1)
The Federal Rules of Civil Procedure
306(1)
Discovery
307(1)
Judge or Jury?
308(1)
The Trial
308(1)
Live Testimony
308(3)
Points to Remember
310(1)
Construction Insurance
311(15)
The Importance of Insurance Planning
311(1)
Types of Insurance
311(1)
Commercial General Liability
312(1)
``Occurrence'' versus ``Claims-Made'' Policies
312(1)
Costs of Defense and Deductibles
313(1)
Layers of Insurance
313(1)
Additional Named Insured
313(1)
Environmental Liability
314(1)
Builder's Risk Insurance
314(1)
Errors and Omissions Insurance
314(1)
Contract Requirements for Insurance
315(1)
Standard Contract Clause
315(1)
Waiver of Subrogation
316(1)
Proof of Insurance
316(1)
Prompt Action to Protect Potential Coverage
317(1)
Sensitivity to Insurance Issues
317(1)
Immediate Notice
317(1)
The Insurance Company's Response to Claims
318(1)
The Insurance Company's Reservation of Rights
318(1)
Litigation with the Insurance Company
319(1)
Routine Coverage Issues
319(1)
CGL Coverage Issues
320(1)
Continuing Damages
320(1)
Diminution in Value
320(1)
Completed Operations
320(1)
``Care, Custody and Control'' Exclusion
320(1)
The ``Work Product'' Exclusion
321(1)
Contractual Liability Exclusion
321(1)
Builder's Risk Coverage Issues
321(1)
Policy Periods
321(1)
Fortuitous Loss
322(1)
External Cause
322(1)
Exclusions
322(1)
Concurrent Causes
322(4)
Points to Remember
323(3)
Construction Industry Environmental Concerns
326(16)
Sources of Regulation and Liability
326(1)
CERCLA Liability
327(1)
Strict Liability
327(1)
Responsible Parties
328(1)
Joint and Several Liability
329(1)
Contribution
330(1)
Storm Water Runoff
330(1)
Air Quality, Asbestos, and Lead
331(1)
Minimizing Environmental Risks
332(1)
Conduct a Prebid Environmental Review of the Contract Documents
332(1)
Exclude Hazardous Substances from the Scope of Work
333(1)
Determine What Materials Will Be Encountered
333(1)
Make an Environmental Prebid Inquiry on Every Renovation and Demolition Project
334(1)
Contract Provisions and Indemnification
335(1)
Insurance
336(1)
Proper Management Techniques
337(1)
Management Review of Environmental Risks
337(1)
Have a Response Plan
338(1)
Immediately Stop Work in the Affected Area
338(1)
Inadvertent Asbestos Abatement
338(1)
Inadvertent Lead Abatement
339(1)
Provide Immediate Notice
340(1)
Do Not Resume Work without Proper Authorization
340(1)
Conclusion
341(1)
Points to Remember
341(1)
Bankruptcy in the Construction Setting
342(20)
Introduction
342(1)
The Bankruptcy Code
342(1)
The Automatic Stay
343(1)
Sanctions for Violation
343(1)
Relief from the Automatic Stay
344(1)
Preferential Transfers
344(1)
Exceptions to the Voidable Preforence Rule
345(2)
Discharge
347(1)
Nondischargeable Debts
347(1)
Status of the Debtor's Contracts
348(1)
Executory Contracts
348(1)
Affirmance or Rejection
348(1)
Assignment
349(1)
Minimizing the Impact on Executory Contracts
349(1)
Terminate before Bankruptcy
350(1)
Exercise Contract Rights
350(1)
Seek Relief from the Automatic Stay
350(1)
Seek a Time Limit on Affirming or Rejecting the Contract
351(1)
Status of Material and Equipment
351(1)
Property of the Debtor's Estate
351(1)
Supplier's Right to Recover Goods
352(1)
Stored Materials
352(1)
Voiding Unperfected Security Interests
353(1)
Status of Contract Funds
353(1)
Unearned Contract Funds
354(1)
Earned but Unpaid Contract Funds
354(1)
Constructive Trust
354(1)
Equitable Lien
355(1)
Joint Check Agreements
355(1)
Setoff
355(1)
Recoupment
356(1)
Surety Claims to Funds
357(1)
Other Sources of Funds
357(1)
Payment Bond Claims
357(1)
Mechanics' Liens
358(1)
Guarantors
359(3)
Points to Remember
359(3)
Alternative Contracting Methods: Multiprime Contracting, Construction Management and Design-Build
362(18)
Traditional Approach to Construction: Advantages and Disadvantages
363(1)
Multiprime Contracting and Fast-Tracking
364(2)
Construction Management
366(1)
Agency Construction Management
367(1)
Construction Manager/General Contractor
367(1)
Design-Build Contracting: What Works to Avoid Disputes
368(1)
The Design-Builder's Perspective
368(2)
The Owner's Viewpoint
370(1)
Design-Build Project Checklist for Owners
371(2)
The Successful Design-Build Project
373(1)
Design-Build Aspects of Traditional Construction
374(1)
Performance Specifications
374(1)
Shop Drawings
375(2)
Secondary Design Review
377(3)
Points to Remember
378(2)
Federal Government Construction Contract Disputes
380(38)
The Scope and Importance of Federal Construction Contracting
380(1)
Scope of the Contract Disputes Act
381(3)
The Freedom of Information Act---A Claim-Preparation and Prosecution Aid
384(1)
Contractor Claims
385(1)
When Must a Claim Be Submitted?
386(1)
Notice Requirements
387(1)
Who May Submit a Claim?
387(2)
What Constitutes a Claim?
389(1)
Written Submission to the Contracting Officer
390(1)
Elements of a Claim
391(3)
Certification Requirement
394(1)
Monetary Threshold for Certification
395(1)
Modification of Claim Amount
396(1)
CDA Certification Language
397(2)
Supporting Data
399(1)
Who May Certify the Claim?
400(1)
Other Certification Requirements
401(1)
Subcontractor Claim Certification
401(2)
Government Claims
403(2)
Contracting Officer's Decision
405(1)
Time Allowed for Issuing the Decision
405(1)
Contents of the Decision
406(2)
Appeal Deadlines
408(3)
Choosing a Forum---Board or U.S. Court of Federal Claims
411(2)
Transfer and Consolidation of Cases
413(1)
ADR and Federal Government Contract Disputes
413(2)
Recovery of Attorneys' Fees in Government Contract Claims
415(3)
Points to Remember
416(2)
Successfully Managing Workers in the Construction Industry
418(23)
Utilizing Employee Background Investigations
418(3)
Employee Safety and Health
421(1)
Wage and Hour Requirements
422(1)
Basic Calculation
423(1)
Overtime Calculation
424(1)
Preliminary and Postliminary Time
424(1)
Waiting and On-Call Time
425(1)
Government Contracts
426(2)
Independent Contractor Status Considerations
428(1)
Employment Discrimination
429(1)
Equal Employment Opportunity Commission
429(1)
Title VII of the Civil Rights Act of 1964
429(1)
The Americans with Disabilities Act
430(1)
Age Discrimination in Employment Act
431(1)
Equal Pay Act
432(1)
Federal Contractor Affirmative Action
432(1)
Office of Federal Contract Compliance Programs
432(1)
Executive Order 11246
433(1)
Vietnam Era Veterans Readjustment Assistance Act of 1974
433(1)
Rehabilitation Act of 1973
434(1)
Family and Medical Leave Act
434(2)
Union Activity
436(1)
Union-Organizing Tactics
437(1)
Salting
437(1)
Intermittent/Partial Strikes
437(1)
Nontraditional Picketing
438(1)
Appropriate Employer Responses to Union Activism
438(3)
Points to Remember
439(2)
Index 441

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