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 | Wait and It’s Waived
WAIT AND IT’S WAIVED
Roads & Bridges | Supreme Court Ruling on Arbitration Delay
Don’t wait to arbitrate! Progressing too far down the litigation […]
Roads & Bridges | Court Defines When Contractors Can Withdraw Due to Mistakes
BIDDING BLUNDER
Roads & Bridges | Court Defines When Contractors Can Withdraw Due to Mistakes
For over 125 years, the vast majority of jurisdictions […]
FEDERAL CONTRACT TERMINATION OR MODIFICATION
The White House has directed Agency heads to “terminate or modify . . . covered contracts.” With some exceptions, there are […]
Roads & Bridges | Maximizing Damage Recovery
MAXIMIZING DAMAGE RECOVERY
Tracking Costs, Avoiding Duplication in Liquidated and Actual Damage Claims
A County and Contractor contracted for construction of a road and […]
Roads & Bridges | Roadwork, Delays and Disputes
ROADWORK, DELAYS, AND DISPUTES
The Subcontract Case In Pecos County, Texas
“Road construction is ubiquitous in our society. . . .” C&C Road […]
Roads & Bridges | Understanding Sovereign Immunity
UNDERSTANDING SOVEREIGN IMMUNITY| Public Contracts and Lessons from Recent Texas Cases
Generally, governmental entities are immune from lawsuits. One exception is contractual. If […]
Roads & Bridges | Indiana Court Upholds Broad ND4D Clause
INDIANA COURT UPHOLDS BROAD ND4D CLAUSE | Ruling Precludes Subcontractor Claims for Delay and Acceleration Damages
This is the story of an Indiana […]
Roads & Bridges | Some Conditions Apply
SOME CONDITIONS APPLY | The scope of insurance policy coverage and what the terms dictate
At some time or another, many have tried […]
Roads & Bridges | Contract Termination
CONTRACT TERMINATION | An unpredictable case teaches hard lessons to each party involved
Court decisions are “opinions.” There are majority and dissenting (disagreeing) […]
