Mediation is often a good idea, but only if it is “ripe.” An unripe mediation can leave a bad taste in your mouth. Have you ever tasted an unripe persimmon? Not only will it drain all the moisture from your mouth, but you may never want to try one again – the tannins of the unripe fruit are very bitter. However, having tasted one ripened to perfection, you will certainly want more. The same is true of most fruit and of your experience with mediation.
Assuming your construction contract includes a mediation provision and you just received a letter from a subcontractor requesting mediation, how should you respond? Since the contract obligates you to mediate, you should agree, right? Yes, but the contract and the request may not account for a pre-mediation exchange of information to ripen the dispute before a mediation session. Mediating without a reasonable understanding of each party’s position and the relative risks and rewards of settlement is like tasting an unripe persimmon – it will drain the good perspective that you had for mediation and you may never want to mediate again.
But how will a pre-mediation exchange of information succeed? After all, the dispute probably arose because the parties couldn’t or wouldn’t work together through normal project procedures? How then can the parties expect to ripen the dispute for mediation?
With time, the gradual exchange of information, a willingness to consider both giving and taking, and maybe the help of a third-party, the parties will understand that resolving the dispute now will likely save time and money later.
Keep a Pass-Thru Claim Burning, Don’t Extinguish Liability
Prime contractors, have you ever submitted a subcontractor’s claim to a public owner? Subcontractors, have you ever wanted to submit a claim against the government, but you had no contract with government?
When You Can’t Recover from a Third-Party (The Economic Loss Doctrine)
Suppose that you (the Contractor) had extra costs and want payment for those extra costs from the designer.
Barbecue and Construction Contracts
While barbecue recipes can be short and simple, contracts can be long and complicated. Fundamentally, though, recipes are very much like contracts: what’s required, how much of each part/ingredient, in what order should they be assembled/added, when, and for how long?
Show Your Work
A mentor of mine once said that process and procedures can be more important than substance and results. Like solving a math problem, how you solve it is often more important than the answer itself. The same is true in resolving construction contract disputes with public owners.
Substandard is Not Defective
The government need not follow the industry standard. It can do less or more.
Hide, Seek, & Seek
Have you ever played hide and seek? If you are the seeker, do you win the game when you find the hidden person? Yes, of course! Unless, you’re a government contractor.
Contractor Schooled School
Have you ever done exactly what you were supposed to do, but it didn’t work and you were blamed anyway? Nevertheless, if contractors follow the owner’s plans and it still doesn’t work, the contractor may be without fault – this is as it should be.
Walk It Off, Keep Going
During a recent soccer game, my seven-year-old son took the ball squarely in the face. But, he walked it off and continued playing. Contractors must do the same with changes.
Are We There Yet?
Next time you close a deal, get the essential terms on paper and signed by all parties before it’s Miller Time.
