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CIC Newsletter - 2008

• January 1, 2008:  Court Rules on Measure of Damages to
  Repair and Complete Contract Work
  By Thomas H. Welby, P.E., Esq.
  What is the proper measure of damages an owner can recover from the contractor as a result of defective work and failure to complete the work under a contract?  As a general rule, the reasonable value of the cost to repair defective work and to complete the work required under a contract is the appropriate measure of damages.  The reasonable cost to complete the contract work may be substantially higher than the actual contract price for that work, as demonstrated in the recent case of Caggianelli v. Son’s Masonry.  Read more...
   
• February 1, 2008:  Court Rules Contractor’s Claims are Not Time Barred
  By Thomas H. Welby, P.E., Esq.
  Contractors and subcontractors should be mindful of contractual and statutory time limitations imposed on their claims.  The most common limitation periods relate to providing notice of the claim and commencing suit.  This article focuses on the second requirement, the timely commencement of an action. 
  Read more...
   
• March 1, 2008:  Trust Funds Assure Payment to Subs and Suppliers
  By Thomas H. Welby, P.E., Esq.
  New York’s construction trust fund statutes are designed to ensure payment for labor and material furnished to a particular project.  The statutes provide that monies received for a construction project by an owner, contractor or subcontractor are trust funds held by them as trustees for payment to those performing work or furnishing materials for the project.  The statutes were intended to prevent owners, contractors and subcontractors from using the trust monies to pay creditors on other projects or keeping the monies for themselves. 
  Read more...
   
• April 1, 2008: Court Rejects Bid For Unresponsiveness
  By Thomas H. Welby, P.E., Esq.
  New York’s competitive bidding statutes serve a dual purpose. The primary purpose is to benefit the taxpaying public by enabling government agencies to obtain the best price for public construction projects through open, competitive bidding.  The secondary purpose is to assure that contractors are on an equal footing when bidding public works. Read more...
   
• May 1, 2008:  Court Rejects Delay Claim
  By Thomas H. Welby, P.E., Esq.
  New York courts will generally bar a contractor’s delay claim when the contract contains a so-called “no-damages-for-delay” clause.  There are recognized exceptions, however, to the no-damages-for-delay clause.  It will not be enforced where the delays were: (a) not contemplated by the parties at the time the contract was entered into; (b) caused by bad faith or willful, malicious or grossly negligent conduct; (c) so unreasonable that it constituted an intentional abandonment of the contract; or (d) resulted from breach of a fundamental obligation of the contract.
  Read more...
   
• June 1, 2008:  Time Limitation Does Not Bar Sub’s Claim
  By Thomas H. Welby, P.E., Esq.
  Statutes of limitations prescribe specific time periods by which a claimant must commence an action for breach of contract.  If the lawsuit is not started within the statutory time after the right to bring the action accrues, the cause of action will be legally barred.  Under New York’s statute of limitations, a breach of contract action must be brought within six years from the date the cause of action accrued.  Claimants should be aware, however, that by contract agreement, the parties may legally reduce the six-year statute of limitations to a substantially shorter time period.
  Read more...
   
• July 1, 2008: Contractor’s Pre-Bid Failure to Inspect Site Dooms Extra Work Claim
  By Thomas H. Welby, P.E., Esq.
  Construction contracts often contain a much-litigated provision that bidders satisfy themselves by personal examination of the location, conditions and requirements of the work and the accuracy of the information furnished for bidding purposes.  Under this exculpatory clause, the contractor generally assumes the risk of unforeseen conditions which may be encountered.  The contractor will be excused from unforeseen conditions if it can be shown that the nature of the unanticipated condition is so well hidden as to prevent discovery by reasonable prebid site investigation and examination of available contract information.
  Read more...
   
• August 1, 2008:  Court Rejects Pay-When-Paid Contract Provision
  By Thomas H. Welby, P.E., Esq.
  Construction contracts often include a “pay-when-paid” provision where a contractor is not obligated to pay his subcontractors until he has been paid by the owner.  This language attempts to shield a contractor from his payment obligations no matter why the owner has not paid him.  Read More...
   
• September 1, 2008: Subcontractor Not Entitled to Delay Damages
  By Thomas H. Welby, P.E., Esq.
  The “no-damage-for-delay” clause by which a party denies liability when it is responsible for delays has been the subject of much litigation.  The clause is found in both private construction contracts and public works contracts and is generally upheld as valid by the courts.  There are exceptions, however, to the enforceability of this clause.  Read more...
   
• NEW October 1, 2008: Corporate Principal Personally Liable for Fringe Benefit Contributions
  By Thomas H. Welby, P.E., Esq.
  Union contracts normally require signatory employers to make periodic fringe benefit contributions to employee benefit funds.  The employer’s obligations to the funds are enforceable under the federal Employee Retirement Income Security Act, commonly called “ERISA.”  If an employer fails to make contributions to the funds, as required under a collective bargaining agreement, it is liable to the funds under ERISA and for breach of the union contract.  Read more...
   
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