When playing a game of cards, how do you handle the “house” rules? You know, those unique ways of playing the game that may differ from those to which you are accustomed. Do you handle those nuances as they come up or before starting the game?
Contractors can often address similar issues before problems arise by deciding which rules will apply with a choice of law clause in their contracts.
Suppose you’re a contractor installing 55 miles of pipeline across three different states (PA, WV, & VA). If (when) a dispute arises, you’d like to resolve it with some consistency and predictability. So, before beginning work, you and the owner agree that no matter the state or the section of pipeline where the problem(s) occurred, the dispute(s) will be resolved according to the laws of only one state.
Good Idea: Include a choice of law clause in your contract to promote consistency and predictability (while reducing potential costs and risk).
But, what if Pennsylvania law prohibits a choice of law other than Pennsylvania, which says that if the construction project is located in Pennsylvania then no other state’s law can apply regardless of the parties’ agreement. Sometimes, the law seemingly frustrates the parties’ agreement. Unless, the “house” decides its own rules apply because the parties agreed by their contract.
Better Idea: When including a choice of law clause in your contract, consider if existing laws may void your choice.
In this example, the owner and contractor agreed that Virginia law would apply to the entire pipeline project spanning across portions of Pennsylvania, West Virginia, and Virginia. Although a Pennsylvania Law prohibited the parties’ choice of Virginia law, a Federal Court located in Virginia decided the parties’ agreement governed. Perhaps the house preferred its own rules?
Virginia General Contractors Not Protected from Pre-Work Claim Waivers
On March 2, 2018, the Governor approved an act of the Virginia General Assembly to make unenforceable pre-work waivers of lien rights […]
Adding Terms to a Government Contract without Saying So
Imagine an incredulous Contractor asking, “Show me in the Contract where it says I’m supposed to do X?” The Government Contracting Officer smugly answers, “even though the Contract doesn’t say so, you must do it anyway.” Is that even possible, when, how?
Differing Site Conditions: When the Part Does Not Equal the Whole
If all apples are fruit, then why are all fruit not apples?
Forum Selection Can Be a Home-Court Advantage
I promise that any disputes between us will be argued at your house. Time passes and a dispute begins to brew. Now, I want to argue at my house, not at yours. You pay costs to argue at my house that you wouldn’t have incurred had I done as agreed. Should I have to reimburse your costs?
No-Damage-for-Delay and Owner-Related Dispute Clauses are No Defense to Surety Liability Under Miller Act
Prime Government Contractors - you may need to update your interim payment waivers.
Contractual Fairness is Whatever the Parties’ Agreed
When you know a current action or inaction is wrong, but you do not object, should you be allowed to object later?
Which Comes First – Specifications or Drawings?
Sometimes it's not better to ask for forgiveness after-the-fact.
Government Contract Claims: When Appeal is Rejection of Settlement
Without a reservation of rights, appealing a Contracting Officer’s Final Decision is a rejection of any offer of payment or settlement included therein. So, the contractor had only three options.
Linking Obligations
If you want to bind the subcontractor to the prime in every way the same as the prime is bound to the owner, then the incorporation clause of the subcontract should be: . . .










