Recently, I posted about the Spearin Doctrine, which says that if a contractor follows the owner’s plans and specifications and something doesn’t work, the contractor is generally not at fault. But, this only works if the contractor first follows the owner’s design. It doesn’t work when the owner’s design will work as is, but you think it could be better.
In recently denying an HVAC Contractor’s appeal, the Armed Services Board of Contract Appeals stated, “the government may require performance [either] in excess of, or below, the standard normally accepted in a trade.” In other words, the government need not follow the industry standard. It can do less or more.
Under a firm, fixed-price contract managed by the Army Corps of Engineers, the Contractor agreed to upgrade the HVAC equipment at a Child Development Center at a facility in Hanover, NH. The project was “limited by budget constraints,” but included work intended to remedy the “thermal discomfort” of the facility’s occupants.
The Contractor advised the Corps that certain design improvements would help the end-user. The Corps considered the advice, but rejected the Contractor’s suggestion. Thereafter, the Contractor “delayed the project because it disagreed with the government’s design choices.” Ultimately, the Corps terminated the Contractor for default.
Payment for Verbal Changes When a Writing was “Required”
Even if your agreement can only be modified by a writing, you may still have a good argument to be paid for extra work.
Pirates and Arbitration
How does a pirate solve a dispute (besides walking the plank)?
Bases Covered?
Contractors, will your current insurance policy cover “your work” as a joint venture partner? The typical answer is NO.
Two Paths at the Same Time to the Same Place
“Two roads diverged in a wood, and . . .” the Prime Contractor had to take both roads at the same time to the same place.
Rules, Which Rules?
Good Idea: Include a choice of law clause in your contract to promote consistency and predictability (while reducing potential costs and risk).
Government Liability for Third-Party Delays
Generally, the Government is not responsible for delays caused by third parties, even other contractors at its own project site, unless the Government affirmatively indicates the site will be ready and available.
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?
