We all know what happens when we “ASS-U-ME” something. So, we should all carefully avoid assuming things unnecessarily.
The prime contractor described below recovered its costs by properly not assuming a duty. This required a distinction among duties that:
- must be done;
- should be done; or
- need not be done.
On a project for the Florida Department of Transportation, the Prime Contractor terminated its landscaping subcontractor for default after the obligatory 72-hour cure period passed. The Prime then promptly submitted a performance bond claim to the terminated sub’s surety. The Prime was obligated to and did wait the 15-day “grace period” for the surety to investigate and respond. However, when the surety failed to substantively respond, the Prime properly mitigated its damages by engaging a replacement subcontractor.
Upon completion of the replacement subcontractor’s work, the Prime submitted its recoverable costs to the defaulted sub’s surety. The surety denied payment by arguing the Prime failed to assist with the surety’s investigation of the default. The Court awarded summary judgment to the Prime finding it had no duty to assist with the surety’s investigation absent an express requirement, which was not included in the bond or subcontract.
The Court agreed that the Prime need not help the surety with the heavy lifting of investigating the sub’s termination for default.
Navigating the Requirements for Claims against Virginia Public Entities
Contractors making claims against Virginia public entities must follow ALL applicable requirements. Such requirements may be found in several places, so check […]
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.
