Mar 22, 2018

Construction Contract Clauses: An Intro to Pay-if-Paid vs. Pay-when-Paid

Construction Contract

If you are a contractor, subcontractor, or supplier in the construction industry, you’ve likely heard the terms “pay-if-paid” and “pay-when-paid.”  Payment provisions are some of the most controversial and heavily negotiated provisions in construction contracts. This article defines the pay-if-paid and pay-when-paid provisions, explains their differences, and provides guidance on how to recognize them in practice. Pay-if-paid and pay-when-paid clauses can alter the normal (i.e., common law) payment obligations running from the contractor to its subcontractor (or subcontractor to its supplier).  Without a contract clause or state statute[i] addressing payment obligations, payment for construction work is due on substantial completion… Read more


Nov 6, 2017

A Primer on Keeping and Maintaining a Good Daily Diary

Construction Projects: Keeping a Daily Diary

Every owner, contractor, subcontractor, engineer, superintendent, and foreman on a construction project should keep and maintain a daily diary that records their personal observations and conversations relating to the project.  The key to preparing a good daily diary is to recognize and contemporaneously record those items that may be significant in the future.  Rarely will this be accomplished by filling out a form at the end of the day because events get fuzzy and forgotten the longer one waits to make a record, especially at the end of the day.  The better approach is to identify those types of items… Read more


Sep 27, 2017

President Trump’s Buy American and Hire American Order

Made in USA - Buy American

On April 18, 2017, President Donald Trump issued an Executive Order (the “Order”) entitled “Buy American and Hire American,”[1] intended to, among other things, strengthen public procurement policies promoting domestic preferences for construction materials used on public projects. Technically, the Order does not make or change any existing law.  Rather, it establishes “the policy of the executive branch to maximize, consistent with the law . . . the use of goods, products and materials produced in the United States.” By issuing the Order, President Trump has sent a clear message that his administration will seek broader enforcement of federal procurement… Read more


Jul 21, 2017

The Importance of Retaining Evidence of Receipt

envelopes mail

A contractor’s ability to recover on a claim may turn on whether the contractor provided timely notice of the claim to the project owner.  Claim notice requirements in contracts are “…legal and binding on the parties in the absence of special circumstances, such as waiver or estoppel.”[i] Claim notice provisions in construction contracts vary in their specific requirements and should be reviewed on each project, but they typically require that the party making a claim provide written notice delivered in person or sent by registered, certified, or statutory overnight mail (e.g. Fed Ex) to the other party.[ii]   But what happens… Read more


Jun 27, 2017

Responding to False, Inaccurate, and Misleading Statements in Business Letters

Man in suit reading business letter

Authored by Darren Rowles and Scott Cahalan Most contractors have received letters, e-mails, invoices, and other forms of correspondence in the ordinary course of business from owners, architects, and others that contain false, inaccurate, or misleading statements.  Does the contractor need to respond to the letter? A contractor should always respond to false, inaccurate, and misleading statements in letters and other correspondence within a reasonable period of time, even if the contractor is rushed for time, or wants to avoid a confrontation, or believes that the statements are so ridiculous that they don’t warrant a response. Ignoring such statements is… Read more


Feb 21, 2017

Constructive Change: A Claim by Any Other Name

Blueprints

What should a contractor do when it and the owner’s representative dispute whether certain work requested by the owner is required by the drawings and specifications and the contract states that (1) the contractor waives its right to a change order by proceeding to perform a change without first obtaining a change order or directive signed by the owner’s representative, and (2) the contractor is obligated to continue performance of the work pending resolution of a disputed claim? If the contractor is right that the work is in addition to what is required by the drawing and specifications, the contractor… Read more


Jan 24, 2017

Is Your Company’s Drug Testing Policy Compliant with OSHA’s New Rules?

Drug Test

Authored by Darren Rowles and Scott Cahalan Occupational Safety & Health Administration (“OSHA”) requires that employers inform employees about how to report occupational injuries and illnesses.[1]  OSHA recently updated its rules to clarify that the reporting method required by employers must include (1) a “reasonable procedure” for employees to report work-related injuries and illnesses, and (2) not discriminate or retaliate against employees who report such injuries or illnesses.[2] A procedure is unreasonable if it would deter or discourage a reasonable employee from accurately reporting a workplace injury or illness.[3] OSHA’s rationale for the new rules is to encourage employees to… Read more


Aug 2, 2016

Understanding Your Surety’s Indemnity Agreement

Authored by: Darren Rowles and Scott Cahalan Contractors on public and private projects are often required to obtain surety bonds to secure their bidding, payment, and performance obligations under a construction contract.[1] A bond is a three-party contract entered into by the surety, the principal (contractor) and the obligee (owner) in which the surety guarantees to the obligee that the principal will perform certain obligations under the contract between the obligee and the principal. For example, a surety on a performance bond guarantees the owner that the contractor will complete the project; and a surety on a payment bond guarantees the owner… Read more


Mar 31, 2016

Material Breach and the Consequences of Being Wrong

Authored by: Scott Cahalan and Darren Rowles It’s not uncommon for parties to a construction contract to exchange heated letters accusing each other of material breach of their contract.  Determining whether a breach occurred is easy compared to determining whether that breach was material. A breach is a failure to perform an express or implied obligation under a contract.  Whether that breach is material turns on the facts and circumstance surrounding the formation of the contract and is often a matter of degree.  For instance, a seller would breach a contract to sell a 1964 metallic mint green Buick Skylark… Read more


Feb 1, 2016

Local Government Procurement Laws – What does it take to be a “Responsive Bidder”?

Authored by: Darren Rowles and Scott Cahalan In a previous article we discussed the requirement that, if it awards a public works contract, a public entity in the State of Georgia must award the contract to the “lowest responsible and responsive bidder,” unless an exception to this requirement applies. This article addresses what it means to be a “responsive bidder.”  While responsibleness focuses on the bidder or proposer, responsiveness focuses on the bid or proposal.  Specifically, responsiveness requires that a bid or proposal respond and conform to the requirements of the invitation for bids or request for proposals (the “Bid… Read more