After much disagreement, the Owner, Designer, Insurer(s), and Contractor(s) have agreed to resolve their differences through a settlement. Do these things to help avoid future angst:
Written: All settlements should be written. A settlement is a new contract among the parties, so treat it as such. Besides, memories are fading faster than ever as we use more electronic media.
Essential Terms: Warranty, Indemnity, Confidentiality (detail all duties that end vs. those that continue).
Essential Documents: Don’t just reference other essential documents; attach them to the written settlement agreement (e.g., final lien/claim release, final change order, and/or tax forms).
Payment: Timing and Method. (If there will be damages for delay of settlement payment, consider adding a liquidated damages clause. Will payment be by wire transfer, physical check, credit, other?)
Enforcement: Include a liquidated damages provision if damages will come from delayed payment. And, since it’s a new contract, will you have to file another lawsuit to enforce the agreement? If so, consider a consent judgment where all parties pre-agree that if the terms are not met, a Court can efficiently and expeditiously enforce.
Closeout: Detail how, who, and when other issues will be closed (e.g., dismissal of all litigation or completion of outstanding work).
Roads & Bridges
Where Does the Buck Stop?
Jon is a monthly contributor to Roads & Bridges magazine. He has been writing the law section for the magazine since January 2020. The link below will take you directly to the Roads & Bridges […]
Pay-If-Paid Unenforceable in Virginia Starting Jan. 1, 2023
As of Jan. 1, 2023, pay-if-paid clauses are unenforceable, regardless of whether a surety/payment bond claim is involved. This is only for subcontracts created on/after 1/1/23.
Also for subcontracts created on/after 1/1/23, the prime must specifically […]
How Short is Too Short
A limitations period is too short when it’s unreasonably short.
Construction Contracting Without Relief Clauses During COVID-19
What to do if your contract lacks the parts to handle COVID-19? Considerations for creating new contracts during COVID-19.
Your Contract Can Handle COVID-19
Uncertainty and risk are not new or novel to contractors. Contracts reduce uncertainty and share the risk of doing or providing something. COVID-19 may have contributed to, but it has not single-handedly created, uncertainty and risk.
Contractors Can Use RFI to Notify the Government
The Board (and the government) should not elevate form over substance in evaluating the sufficiency of a contractor’s notice.
Taxes Due!
It’s tax season again, so it’s time to pay the piper.
Contractor Wins when Government Reconsiders Accord
Ever had buyer’s remorse or second-guessed a decision? When the U.S. Army Corps of Engineers did that, a Contractor won its claim for time and money.
On a flood control project near Nogales, Arizona, severe flooding […]
Claim Certified with Digital Signature Deemed OK
The law is not a trend-setter. It doesn’t readily change or adapt to tech. So, a commonplace practice in business became a dispute when a claimant digitally certified a claim under the Contract Disputes Act.

Jonathan J. Straw
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