Differing & Unforeseen Conditions

1. Differing & Unforeseen Conditions • Differing Site Conditions- actual conditions differ from the representation made in the contract documents (MSP airport) • Unforeseen Condition- unusual situation not reasonably anticipated based on contract documents

2. Differing & Unforeseen Conditions • Contractor is awarded damages for differing site conditions • Contractor NOT awarded damages for unforeseen site conditions unless they rise to the level of practical impossibility, commercial senselessness, or there is contract language transferring risk (common)

3. Differing & Unforeseen Conditions • If the contract is silent, then ONLY unforeseen conditions can arise • Unknown physical condition of an unusual nature that differs materially from those ordinarily encountered (buried tank example) • Doesn’t cover weather, economic condition, market factors, etc.

4. Differing & Unforeseen Conditions • Owner is liable only if • Risk transfer clause is executed a priori • Objective or practical impossibility • Tort claim arises • Ambiguous contract could be interpreted as differing (not unforeseen)

5. Differing & Unforeseen Conditions • Unforeseen site conditions clause is standard in most contracts. Can be invoked if • Condition is unknown to contractor • Condition is unusual • Condition is materially different

6. Differing & Unforeseen Conditions • Objective or practical impossibility was covered in chapter 8 • Nondisclosure- owner has a duty to report (widely recognized by most courts) soil borings is example • Tort claim- additional contract clauses to deal with torts (fraud, negligence, misrepresentation)

7. Differing & Unforeseen Conditions • Ambiguity- need interpretation of whether the condition is unforeseen or differing (transfer clause eliminates distinction in most cases) • Prebid site inspection- required in most contracts. Visible conditions cannot be later claimed as unforeseen or differing

8. Warranties • Special contract guaranteeing quality or performance • Express warranties- expressed by the terms of a contract, generally written, with guarantees contained in the contract (subs supply many) • Implied warranties- added into a contract by law. Must no law to act on the warranty (3-day revocation period)

9. Warranties • Express warranty- • can be oral, but hard to enforce • Oral is unenforceable beyond one year • Installer versus supplier warranties • Many owners prefer distributor or manufacturer warranty because less likelihood of default (roofs, windows)

10. Warranties • Types of implied warranties- • Spearin warranty- owner “implies” the plans and specs are complete and sufficient for construction • Contractors warranty- “good and workmanlike” standard of construction • Merchantability of goods warranty • Fitness for Purpose warranty

11. Warranties • Contractors warranty- • Good and workmanlike manner • Case law interpretation • Different jurisdictional standards • Habitability standard prevails • Roof and window leaks are examples

12. Warranties • Merchantability of Goods- • UCC statute • Sale of goods by manufacturers and commercial sellers • Like quality and performance for goods used for similar purpose • Used for appliances, HVAC equip, hardware, etc.

13. Warranties • Fitness for Purpose Warranty • UCC statute • Similar to merchantability warranty, but for a specific purpose • No “like quality standard” exists • Sold for a specific use • Some types of pumps, conveyance systems, etc.