Subcontractors Construction Contracts

News & Analysis as of

Title Insurance Treatment of Mechanic’s Liens

The “Homeowner Amendments” to Ohio Mechanic’s Lien law significantly limits the rights of subcontractors and suppliers to file mechanic’s liens against a homeowner’s property. These apply if the owner has paid the builder in...more

Broad “Assumption of Liability” Clause in Subcontract Likely Trumps “Waiver of Subrogation” Clause in Prime Contract

In a recent case handled by Bradley, a federal court in Maryland issued a decision attempting to reconcile inconsistent contract provisions. The general contractor said that its fire sprinkler subcontractor was...more

“Rip and Tear” Damage Remains Covered Under CGL Policy as “Accident”—for Now.

The Colorado Supreme Court has approved a settlement between the parties to an appeal of the 2012 Colorado Pool Systems v. Scottsdale Insurance Company Court of Appeals case, leaving that ruling intact. The ruling parses a...more

California Court Limits Recovery for General Contractors Relying on Subcontractor Bids

The court’s decision allows subcontractors to place unforgiving terms in their bids and gives them an ultimate out if general contractors do not agree to those terms. General contractors should pay attention to a...more

FAQ on the Limitations on Subcontracting New Rules

We recently held a live seminar and a webinar on the new Limitations on Subcontracting (“LOS”) rule. We reviewed the questions submitted during the sessions, and noticed that many of the same questions were being asked by...more

Minnesota Rewrites Construction Rules for Prompt Payment and Retainage

Minnesota has modified its prompt payment and retainage statute (Minn. Stat. 337.10). These revisions mean that many owners, contractors and subcontractors will have to revise the payment provisions of their construction...more

Federal Court in Maryland Denies Summary Judgment, Holding That Subcontract Provision Placing Responsibility for Property Damage...

Turner Constr. Co. v. BFPE Int’l, Inc., No. JKB-15-368, 2016 U.S. Dist. LEXIS 39161 (D. Md. Mar. 25, 2016) - The University of Maryland Medical Center (“UMMC”) entered into a contract (the “Prime Contract”) with Turner...more

Subcontractor’s Failure to Strictly Comply With Notice Provision Costs $200,000

Whether you are an owner, contractor, subcontractor or supplier, you will want to read the rest of this post since it illustrates precisely what all those attorneys have been telling you for years: “Please, please, please...more

Top 7 Factors Affecting Labor Productivity Losses On A Construction Project

Construction labor is always in the news. Last month, I wrote an article for the Nashville Business Journal challenging industry leaders on how to respond to the shortage of skilled labor in the area. Recently, the U.S....more

Fed. Circ. Further Dulls CDA's Statute Of Limitations

A few years back, a string of decisions at the Armed Services Board of Contract Appeals and the Court of Federal Claims invoked the Contract Disputes Act’s six-year statute of limitations to dispose of several long-pending...more

Critical Amendments to Minnesota's Prompt Payment and Retainage Laws

The Minnesota legislature recently passed a bill significantly amending Minnesota's prompt payment statute. The revised statute specifically authorizes contractors and subcontractors of any tier to stop work if they are not...more

Subcontractor Not Entitled to Payment After Refusal to Perform Disputed Extra Work

In the hustle and bustle of completing a construction project it can be easy to overlook the importance of the contract.  However, when a dispute arises the contract generally dictates the outcome of that dispute.  A recent...more

Construction Subcontractor Settles FCA Allegations for $2.8 Million

A recent settlement illustrates the broad reach of the FCA and the substantial liability that “mere retention” of an overpayment can impose on contractors several steps removed from a government contract. The dispute...more

Your Invaluable Mechanic’s Lien Rights – Exercise Them!

The right to file a mechanic’s lien is established by state statute, allowing those providing work, services, materials or equipment to a construction project with additional valuable security in the event of non-payment of...more

Pennsylvania Commonwealth Court Holds Enforceable School District’s Oral Promise to Pay Subcontractor for Returning to Job after...

Zacherl, Inc. v. Flaherty Mechanical Contractors, LLC, 131 A.3d 1030, 2016 Pa. Commw. LEXIS 22 (Jan. 6, 2016) - The West Allegheny School Board (the “School Board”) voted to approve the School District’s (the...more

Limitations of Liability – Scenario 3: Pay if Paid and Flow Through Clauses

I suppose that it is apropos that I have been delayed in writing this final piece in the four-part Limitations of Liability series, relating to subcontract pay if paid and flow through clauses. Being more than one step...more

One Word Makes All The Difference – The Distinction Between “Pay If Paid” and “Pay When Paid” Clauses

Payment clauses in California construction contracts are often complex and multi-layered. This is especially true in contracts between general contractors and their subcontractors. The general does not want to pay the subs...more

Defence & Indemnity - February 2016: V. Surety and Bond Issues: The relationship between trust and lien claims under Provincial...

Stuart Olson Dominion Construction Ltd. v. Structal Heavy Steel, 2015 SCC 43, per Rothstein, J. - I. FACTS AND ISSUES - Stuart Olson Dominion Construction Ltd. (“Dominion”) was the general contractor of a football...more

Under Construction - March 2016

Welcome to the first edition of our Under Construction newsletter for 2016. Indemnity laws and clauses are a big part of construction contracts. They can make or break a project. Defend and indemnify obligations have the...more

Lessons in Fraud, Preconditions to Progress Payments and the Right of Setoff: Hutchinson v Glavcom

The NSW Supreme Court recently handed down its decision in the matter of J Hutchinson Pty Ltd v Glavcom Pty Ltd [2016] NSWSC 126, in which K&L Gates represented Glavcom. The decision sheds light on numerous issues, including...more

Services that are Worth Less Aren’t Necessarily Worthless

The Sixth Circuit brought a refreshing sense of reality to the government’s sometimes unreal calculation of damages in False Claims Act (FCA) cases. In this case the government had sought, and won at the trial level, an award...more

Government Contracts Review, Alston & Bird LLP, January 2016

IN THIS EDITION: THE GOVCON FILES - It’s Good to Be King: The Curious Case of United States v. JAAAT Technical Services PROTEST DECISIONS - GAO Clarifies Discussions and Discusses clarifications...more

Subcontractor Performing Services may be Liable in Strict Liability For Purchasing and Installing Defective Products in Fulfilling...

Jovana Hernandezcueva v. E. F. Brady Company, Inc. - Court of Appeal, Second Appellate District, Division Four (December 22, 2015) - The doctrine of strict liability is ordinarily inapplicable to transactions...more

"My Bad, I Thought It Was in Good Faith" is Not Good Enough - Contractor Ordered to Pay Prompt Payment Penalties

Retention clauses are almost always included in California construction contracts and permit an Owner to withhold a portion of what is owed to the General Contractor as security to ensure the proper completion of the work....more

Final Acceptance Under Utah’s Retainage Law: It’s Not Over Until It’s Over

Property owners seeking to insulate themselves from some of the inherent risks associated with construction projects often turn to retainage provisions to reallocate very specific risks—the risks of delay, defective...more

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