Construction Dispute Settlement: Dealing with Details

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).

Construction Development Services, Inc. v. Modern Environments, Inc., Record No. 160240 (Va., Dec. 15, 2016).

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