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.
Linking Obligations
If you want to bind the subcontractor to the prime in every way the same as the prime is bound to the owner, then the incorporation clause of the subcontract should be: . . .
Termination of Government Contracts for Convenience (T4C)
Imagine you’re a Government Contractor under a firm, fixed-price contract and you’ve done nothing wrong. Nevertheless, the Government has decided to unilaterally end its contract with you. Yes, the Government can do this...
Government Contractors: Build a Snowman in August
As a Government Contractor, when have you agreed to perform a certain way, but later realized that another way is better for everybody? When the Government agrees, expressly or impliedly, to the alternative performance, it waives a credit for the unperformed work.
Construction Dispute Settlement: Dealing with Details
Reap the benefits of settling a construction dispute by doing these things.
E-mail Signature Not Enough to Certify a Claim
Construction project professionals routinely send e-mails with “signatures,” which typically include the sender’s typewritten name, title, contact information, and/or company logo. But, this sort of e-mail “signature” is not enough to certify a claim to the Government.
Government Contractors: Ask for a “Sum Certain” in Your Claim
If your Claim includes an item for damages with an amount “TBD,” you could lose the entire Claim.
Contractors: Be Aware When Contracting with Virginia Public Agencies
Without a valid contract, a Virginia public entity has no duty to to pay for any of your work.
Constructive Acceleration
Contractors know that time is money. So, the point is clear when expressly told to “Speed Up! Go Faster!”
But, what do you […]
Construction Contracts & Whodunit
Imagine reading a crime novel and just when you think you figured out whodunit, a plot twist suggests a different culprit. In construction contracting, finding the right answer can be a difficult task when
