Another post discussed that your existing contract can probably handle the risks related to COVID-19. But, what to do if you contract lacks the support to handle COVID-19 and what to consider when creating new contracts during COVID-19?
What if the contract does not have a force majeure or other relief clause? First, consider the language of any applicable changes clause. Second, review any governmental emergency relief acts that could help. Third, the common law doctrine of frustration may be available, under which an obligation may excused or discharged when a fundamental assumption of the contract is not true or something later occurs rendering performance physically impossible or commercially impracticable. However, a radical price increase alone is likely insufficient.
When creating new contracts during COVID-19, do not rely solely upon force majeure clauses. Because unforeseeability is an element of most clauses, parties contracting during an event will find it very difficult to argue they could not contemplate the potential impact of the event. Consider including or adapting a price acceleration provision to prescribe or liquidate relief.
Trick or Treat in Government Contract Claims
Without a request for a contracting officer’s final decision, claimants may seek treats, but get tricked instead.
Owner Nonpayment is No Defense to Miller Act Claim
As if you needed confirmation that the Federal Miller Act is a powerful tool for unpaid subcontractors, this is it. Even when a Prime ordered and accepted the Sub’s work, but didn’t have to pay under the Subcontract, the Subcontractor still. . . .
Trust, but Verify
Rely at your own risk upon a Contracting Officer’s statements when statutes or contract provisions may conflict.
Payment for Verbal Changes When a Writing was “Required”
Even if your agreement can only be modified by a writing, you may still have a good argument to be paid for extra work.
Pirates and Arbitration
How does a pirate solve a dispute (besides walking the plank)?
Bases Covered?
Contractors, will your current insurance policy cover “your work” as a joint venture partner? The typical answer is NO.
Two Paths at the Same Time to the Same Place
“Two roads diverged in a wood, and . . .” the Prime Contractor had to take both roads at the same time to the same place.
Rules, Which Rules?
Good Idea: Include a choice of law clause in your contract to promote consistency and predictability (while reducing potential costs and risk).
Government Liability for Third-Party Delays
Generally, the Government is not responsible for delays caused by third parties, even other contractors at its own project site, unless the Government affirmatively indicates the site will be ready and available.
