Anyone regularly reviewing construction contracts will come across those dreaded liquidated damage clauses. They require contractors, and in turn subcontractors, to make significant payments to compensate for late completion of work – $100-$500-$1,000 per day wouldn’t be unusual. But are these big dollar payment demands enforceable? Most of these clauses are written with standard disclaimers. They state that actual damages will be difficult if not impossible to determine if there is a breach. So let’s…

How does your contract address dispute resolution? It probably says arbitration is the preferred method. And why not? It’s been favored by construction professionals for years. But that popularity may be fading. In fact, the American Institute of Architects contract forms now state that if the parties don’t specifically select arbitration as the way to deal with a dispute, then the choice automatically defaults to litigation. Problems with Arbitration Most people don’t realize that arbitration…

In this article, we will discuss in detail the answer to one of the most common questions we receive in our construction law firm, if I’m not getting paid, can I stop working, and if I do, how do I get paid? To determine whether or not to stop working if you are not getting paid, you need to consider the following. What does your contract say about stopping work? What is the status…

A contractor’s daily reports are critical. In many instances, they are considered key evidence showing what actually occurred at specific times on the job. And since people’s memories fade, those trying to get the truth will likely rely heavily on what the daily reports say happened (especially when presented with a corroborating witness). The problem is that many contractors fail to create these reports. And those that do create them, do it only at the…

A contractor’s daily reports are critical. In many instances, they are considered key evidence showing what actually occurred at specific times on the job. And since people’s memories fade, those trying to get the truth will likely rely heavily on what the daily reports say happened (especially when presented with a corroborating witness). The problem is that many contractors fail to create these reports. And those that do create them, do it only at the…

What Is A Change Order? A change order is a change to a contract. It typically addresses one or all of the following three things – the scope of the work, contract price, or time. But there are other things that can be modified with a change order. You can add or remove terms to a contract by using a change order.  It can be written, but it also can be oral, meaning that you…

Homebuilders are accustomed to managing expectations. They do this at the initial client meeting, when drafting contract provisions, and in all progress meetings. As the project moves from design to occupancy, smart builders work hard to deliver the highest quality work possible while at the same time not promising more than they can deliver. Besides making for happier customers, this also helps minimize a builder’s liability. Managing expectations is a bit more complicated when it…