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?
A Federal Court in Northern California said yes – I have to pay your costs because I broke my promise.
During a project for the U.S. Navy in Djibouti for electrical and mechanical power-plant upgrades, a Subcontractor agreed that any disputes between it and the Prime Contractor would be resolved in a California Federal Court. The Prime is a U.S. company with its headquarters in California. The Sub is a Lebanese company with no regular presence in the U.S. In fact, it appears the Sub has never been to the U.S.
Recap: The dispute has nothing to do with anything near your headquarters/office/house, the Project is nowhere near your office, I’ve never been near your office, it’s probably more convenient for you to argue near your office, which is why you included this term in the Subcontract, and (most importantly) I agreed to only argue near your office.
Result: The argument will be near your office, not mine and not near the Project where we both worked and lived for many months. And, I now have pay your costs incurred because I tried to argue with you near the Project.
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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