By Bruce Jervis
If a contractor receives a progress payment covering work performed by subcontractors and then fails to use those funds to pay the subcontractors, it is almost certainly a breach of contract. A Missouri court recently ruled it was also civil conspiracy and fraud.
A Missouri construction company was a corporation owned by three shareholders. Those individuals diverted progress payment funds to their own use, leaving subcontractors unpaid. The three shareholders were held personally liable for actual and punitive damages. The court said intentional misrepresentation and misappropriation of the funds distinguished this situation from a “garden variety” breach of contract case. ... Read more.
Featured in this Week’s Construction Claims Advisor:
- Individual Owners Liable for Misrepresentation of Subcontractor Payment
- Public Bidding Restricted to Privately Approved Contractors
What happens when you have conflicting details on two different contract drawings? Which one is the contractor entitled to rely upon? When does “or equal” actually let you substitute a product that you consider equal? What exactly is the role of inspection on a construction project? These questions and more are covered in a chapter on contract interpretation by attorneys Brian Bennett and Jonathan Blocker in an upcoming book on construction claims. In this article, the authors discuss the role of inspection on construction project, which is sometimes misunderstood or misused. ... Read more.
By Steve Rizer
It took three years, but the Treasury Department has responded to some concerns the American Subcontractors Association (ASA) raised about the agency’s planned rulemaking relating to surety companies that do business with the United States. The department offered its reply earlier this month when it issued a final rule to clarify the circumstances in which a federal agency’s bond-approving official can decline to accept a bond underwritten by a Treasury-certified surety. To read the gist of ASA’s concerns and how the department responded to them, click here.
By Steve Rizer
A recent analysis of 18 projects that M.A. Mortenson Company completed between 2004 and 2013 using virtual design and construction (VDC) has uncovered some impressive benefits that others in the industry may want to note. Benefits stemming from the use of VDC in these projects include a collective 600 total days of schedule reductions, productivity increases surpassing 25 percent, and an average cost reduction of 2.9 percent. However, in reporting the results of the analysis during a BIMForum presentation in Dallas earlier this month, Mortenson Integrated Construction Director Ricardo Kahn was quick to point out that the technology alone did not produce these benefits. To see what other factors Mortenson believes contributed to the VDC success story, click here.