Posted: October 11, 2023 | Legal
Risks are inherent in every construction project and all parties involved face them: owners, designers, general contractors/builders, subcontractors, suppliers…. Equitably allocating such risks is one of the most important and most negotiated areas of any construction related contract. Limitations of liability provisions are key to risk allocation. These provisions include no damage for delay provisions and caps on delay damages, warranty limitations and exclusions, indemnity limitations, and consequential damage waivers. Another, and the focus of this article, is a liability cap fixing the total amount of damages for which a party may be liable under the contract (the “Liability Cap”). Liability Caps have become more and more common in construction and construction related contracts, including major component supply agreements and design agreements.
Posted: June 26, 2023 | Legal
Cost-of-the-work agreements (aka “cost plus” contracts) are commonly used in commercial construction contracting to establish the terms and conditions for a project based on the cost of the work performed.i The majorfamilies of standard construction contracts include a cost-ofthe-work plus overhead and profit in their product offerings. In light of price escalation, supply chain disruptions, and rampant inflation, cost-plus contracts have been identified as a contracting tactic to address price uncertainty that still runs rampant in today’s design and construction industry. ConsensusDocs is offering a webinar that will take a deep dive into cost-of-the-work agreements and factors in evaluating if, how, and when to set a guaranteed maximum price (GMP) on such agreements.
Posted: June 23, 2023 | Legal
There is no “one-size-fits-all” approach to choosing the dispute resolution procedure in construction contracts. The appropriate form of dispute resolution depends on the particular situation of each project and the parties’ priorities. In this article, I will give you some things to consider whether arbitration makes sense as the form of dispute resolution for your next project.
Cost is usually the first consideration, and there are two sides to this coin. If you choose to have a private organization administer the arbitration proceeding, those organizations tend to charge a filing fee that, in my experience, is significantly higher than the filing fee you may pay to a court to file a lawsuit. In most instances you also will have to pay the arbitrator(s) for their time devoted to the arbitration. You don’t have to pay a judge or jury for their time to decide your case.
Posted: June 9, 2023 | Legal
On May 19th , the Texas Supreme Court ruled unanimously in favor of Pepper-Lawson Horizon International Group and against Texas Southern University. The American Subcontractors Association supported a friend-of-the-court brief on behalf of Pepper-Lawson last year, seeking an appeal on a decision that held that an entity could not be sued for prompt payment violations because it had not waived sovereign immunity.
This ruling has a profound impact on all contractors doing business with the State of Texas. Specifically, state government entities will no longer be able to unreasonably stonewall contractor claimants. The often-used defense practice of challenging the Court’s jurisdiction to stall the case has now been properly clarified and limited. As of today, if contractors can properly state a claim under the applicable waiver of sovereign immunity statute, then the case can proceed. Further, contractors are no longer required to disprove all of the State’s defenses in order to proceed with their case. This case sets an important precedent for courts across the country as it applies to prompt payment for our subcontractors.
Contract And IP Implications Of Design Professionals Monetizing Non-Fungible Tokens Comprising Digital Construction Designs
Posted: December 30, 2022 | Legal
There is an emerging market that appears poised to increasingly provide opportunities to monetize architectural and other construction designs through the sale of non-fungible tokens (NFTs). Last year, artist Krista Kim reportedly made the first sale of a digital home design via an NFT marketplace, for over $500,000. With some NFTs selling for millions of dollars, monetizing digital designs is undoubtedly an enticing prospect for architects, engineers, and other design professionals. It is thus critical to understand the application of intellectual property rights to NFTs and to address those rights in contracts involving design professionals.