VOLUME 2   ISSUE 35   AUGUST 30, 2013


By Bruce Jervis


Construction contracts are rife with waivers. Parties are asked to waive certain types of claims, damages or remedies. This leads to questions. Are these waivers effective? What does it take to make a waiver enforceable?


Waivers, which are similar to disclaimers, are viewed with skepticism and strictly construed against the party attempting to impose the waiver. If clear and unambiguous, however, they are frequently enforceable. It depends in part on how fundamental the waived right and how intentional the waiver. This was illustrated in a recent case in Montana. ... Read more.


Featured in this Week’s Construction Claims Advisor:

  • Subcontract Waiver of Trial by Jury Unenforceable
  • Bidder Failed to Seek Clarification of Patent Ambiguity
  • Subs on Federal Project Can’t Reach Undisbursed Funds


By Steve Rizer


The pricing mechanism used in construction agreements “very often” may be dictated by the level of design that has been achieved, Sherman & Howard LLC attorney Stephen Hess told a group of professionals attending a webinar that WPL Publishing held last week. This is one of the points he made in summing up his presentation, entitled “Construction Contract Pricing Clauses: Shifting Risk and Managing Scope Disputes.”


“If the level of design is 100 percent, a stipulated-sum contract may make sense if you’re a contractor,” Hess told a target audience of architects, engineers, construction managers, contractors, subcontractors, consultants, public and private owners, and construction law attorneys. “If only 80 percent of the design has been achieved, then a stipulated-sum contract might be foolhardy because you don’t know exactly what it is that you’re promising to build.” ... Read more.


By Scott Turner


Earlier this summer, a state high court joined a growing national trend by holding that defective completed construction work can be covered under commercial general liability (CGL) policies as an “occurrence” that causes “property damage” and can avoid the Your Work Exclusion, where the damage is to the work of the policyholder’s subcontractor. The court also rejected the common insurance company arguments that a CGL policy is not a performance bond and that such a policy only covers tort claims, never contract claims. ... Read more.


By Steve Rizer


Now that BIMForum, a group of building information modeling (BIM) users from across the United States, has unveiled its “first-of-its-kind” standard establishing definitions for how complete models need to be for different stages of the design and construction process, the question becomes, “How often will the standard need to be updated?”


Although the initial plan is to update the Level of Development Specifications document yearly, Jim Bedrick, co-chairperson of the team that drafted the standard, told ConstructionPro Week (CPW), “We’ll issue interim updates if somebody finds a glaring hole in it or something like that. We want to strike a balance between keeping it current, … keeping it state of the art, and changing it all the time. I mean, it’s not going to work much as a reference if it changes all the time.” ... Read more.


By Steve Rizer


August 2013 Download Library Addition
As new webinar recordings are made available to the ConstructionPro Network free member Download Library on a monthly basis, ConstructionPro Week will provide a brief summary of each event for the benefit of its readership. Here is the summary for the August 2013 addition:


One of the keys for avoiding “scope creep” in a construction project is to ensure clear contract language, Todd Vandenhaak, senior vice president at Marsh Risk Consulting, told professionals attending “Avoiding the Pitfalls of Scope Creep in Construction Projects,” a WPL Publishing webinar for which a recording recently was added to the ConstructionPro Network (ConstructionProNet.com) Download Library -- free of charge for members. He and fellow Marsh Managing Consultant John Ciccarelli offered plenty of advice on this topic to a target audience of engineers, architects, risk management professionals, construction and project managers, presidents, vice presidents, contractors, subcontractors, and others.


Terms such as “to builder’s selection,” “typical,” and “reasonably” can make for ambiguous contract language and give rise to scope creep, which involves uncontrolled changes or continuous growth in a construction project’s scope. “And this isn’t to say that if you see these words in your contract, you’re going to have scope creep or a lack of clarity,” Vandenhaak said. “They are, I’ll say, words to flag that you need to put a little more attention into how [they are] being used.” ... Read more.





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