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Legal Issues in Construction Contracting

Legal Issues in Construction Contracting. Saul C. Glazer Madison, Wisconsin October 1, 2010. © 2010 Axley Brynelson, LLP. Contractual Risk Allocation . Construction process is risk prone Risk should be assigned to the party best able to manage or bear the risk

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Legal Issues in Construction Contracting

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  1. Legal Issues in Construction Contracting Saul C. Glazer Madison, Wisconsin October 1, 2010 © 2010 Axley Brynelson, LLP

  2. Contractual Risk Allocation Construction process is risk prone Risk should be assigned to the party best able to manage or bear the risk Contracts are a tool for allocating/assigning risk © 2010 Axley Brynelson, LLP

  3. Role of Contracts Source of Rights, Responsibilities and Procedures Tool for Assigning Risk Planning Tool Handbook for Performance Dispute Resolution and Prevention Tool © 2010 Axley Brynelson, LLP

  4. Standard Form Contracts: Disadvantages Lengthy, cumbersome Not tailored to local law Owner-specific regs Modification can create inconsistency © 2010 Axley Brynelson, LLP

  5. Considerations in Using Standard Forms Know their content Tailor for specific projects Understand that a change in one may require change in another Legal review recommended © 2010 Axley Brynelson, LLP

  6. Standard Form Contracts AIA AGC COAA DBIA EJCDC Public © 2010 Axley Brynelson, LLP

  7. Scope of Work Constructible design Integrated construction documents Defined by plans and specs Also defined by GCs and SCs © 2010 Axley Brynelson, LLP

  8. Changes Changes in Scope Delays DSCs © 2010 Axley Brynelson, LLP

  9. Changes: Key Issues Allocation of risk of uncertainties Change Process Claims Process © 2010 Axley Brynelson, LLP

  10. Delays Excusable delays – time Compensable delays -- $ Owner responsibility Disruption/acceleration DSCs © 2010 Axley Brynelson, LLP

  11. DSCs Type I – Physical conditions at site materially different than indicated in contract documents Type II – Physical conditions at site unusual or differ materially from those normally encountered or expected © 2010 Axley Brynelson, LLP

  12. DSC Requirements Prompt notice by contractor Prompt response by owner/A-E © 2010 Axley Brynelson, LLP

  13. Limiting DSCs Site Investigation clause Disclaimers on data Full disclosure © 2010 Axley Brynelson, LLP

  14. Insurance General liability Property/Casualty Professional liability Builder’s Risk Special endorsements (e.g., environmental) © 2010 Axley Brynelson, LLP

  15. Surety Bonds Required on public work Performance Bond Payment Bonds © 2010 Axley Brynelson, LLP

  16. Warranties Express Implied General Compare to correction obligation Design warranty by Design/Builder © 2010 Axley Brynelson, LLP

  17. Indemnification Purpose Mechanics Limitations © 2010 Axley Brynelson, LLP

  18. Limitation of Liability $ Limits Waiver of damages Covenants not to sue © 2010 Axley Brynelson, LLP

  19. Dispute Resolution Claims Process Mediation Arbitration Litigation © 2010 Axley Brynelson, LLP

  20. Risk Management Practices Quality Contracts Follow contract procedures Respect means and methods Communications Documentation Timeliness © 2010 Axley Brynelson, LLP

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