A limitations period is too short when it’s unreasonably short.
Recently, the U.S. Court of Appeals for the Fourth Circuit affirmed the Maryland District Court upholding a one-year contractual limitations period for arbitration. Along with a separate contractual waiver any trial in a traditional court setting, the plaintiff was SOL when he didn’t demand arbitration within one year.
The Court reaffirmed its prior holding from a separate 2007 case that, generally, “limitations periods may be shortened by agreement, so long as the limitations period is not unreasonably short.” Absent the agreement, the plaintiff had three years to file a lawsuit for breach of contract.
See also: When typical limitations don’t apply.
Read, re-read, review, and thoroughly understand your contracts. It’s often better to reasonably act and be rejected than not act or be too late.
Bracey v. Lancaster Foods LLC, No. 19-1292 (4th Cir. Dec. 16, 2020)
Keep a Pass-Thru Claim Burning, Don’t Extinguish Liability
Prime contractors, have you ever submitted a subcontractor’s claim to a public owner? Subcontractors, have you ever wanted to submit a claim against the government, but you had no contract with government?
When You Can’t Recover from a Third-Party (The Economic Loss Doctrine)
Suppose that you (the Contractor) had extra costs and want payment for those extra costs from the designer.
Barbecue and Construction Contracts
While barbecue recipes can be short and simple, contracts can be long and complicated. Fundamentally, though, recipes are very much like contracts: what’s required, how much of each part/ingredient, in what order should they be assembled/added, when, and for how long?
Show Your Work
A mentor of mine once said that process and procedures can be more important than substance and results. Like solving a math problem, how you solve it is often more important than the answer itself. The same is true in resolving construction contract disputes with public owners.
Substandard is Not Defective
The government need not follow the industry standard. It can do less or more.
Hide, Seek, & Seek
Have you ever played hide and seek? If you are the seeker, do you win the game when you find the hidden person? Yes, of course! Unless, you’re a government contractor.
Contractor Schooled School
Have you ever done exactly what you were supposed to do, but it didn’t work and you were blamed anyway? Nevertheless, if contractors follow the owner’s plans and it still doesn’t work, the contractor may be without fault – this is as it should be.
Walk It Off, Keep Going
During a recent soccer game, my seven-year-old son took the ball squarely in the face. But, he walked it off and continued playing. Contractors must do the same with changes.
Are We There Yet?
Next time you close a deal, get the essential terms on paper and signed by all parties before it’s Miller Time.
