馃攳
Contract Law: Four Construction Contract Clauses that pose special challenges for contractors - YouTube
Channel: KRISHNA CHIDDARWAR
[0]
many small construction businesses
forgo legal counsel to save on
[4]
expenses
but end up paying for it in the long run
[7]
contractors of all kinds are at a
disadvantage
[10]
long before moving on to the project
site merely because some contract
[14]
clauses are stacked against them
in this video we are going to discuss
[18]
the four construction contract clauses
that possesses special challenge for
[22]
contractors
no damage for delays when a clause
[26]
doesn't allow the contractor to get paid
for delays
[29]
it is no damage for delays clause these
clauses
[32]
often also limit the contractor's
ability to extend the time to completion
[36]
since construction is a very risky
business and success often depends on
[40]
the completion of project within a
specific time
[43]
these clauses limit the claims
contractors can submit when things
[47]
beyond their control
affect the schedule an enforceable
[50]
contract that allocates risk
accurately should allow contractors to
[54]
get paid for all the delays
they don't cause, that should include the
[58]
delays for acceleration,
changed conditions and disruptions
[61]
clauses that affects claims like this
one does
[64]
also specify the time frame allowed to
submit claims
[68]
the contract should allow ample time to
provide delay notices and to submit
[72]
claims
if you can't avoid no damage for delays
[75]
clause then have the contract
list the delays for which you will not
[78]
get paid and insist
that listed delays include only those
[82]
which you have no control over
second indemnify demand and hold
[88]
harmless
throughout contract law you often see
[91]
clauses like indemnify demand and hold
harmless
[94]
sometimes these clauses includes only
one or two of the actions
[98]
when you are assessing risk you need to
know what each of these words mean from
[102]
legal perspective
if you agree to indemnify it means you
[106]
will reimburse the other party in the
contract when there is a loss or damage
[110]
ideally you would only compensate for
the risk that you have control over
[114]
that way you are not offering to pay for
losses and damages that someone else
[118]
cost
when you agree to defend another party
[121]
you are agreeing to pay
what it cost to defend them against a
[124]
suit brought by a third party
unlike when you agree to indemnify when
[129]
you agree to defend
there doesn't need to be a loss that's
[132]
proved you are
immediately on the hook for a potential
[135]
liability when a third party files a
claim
[137]
when you agree to hold harmless you're
saying that you will both
[140]
defend as well as cover losses no matter
who's at fault
[144]
the most important thing about these
clauses is that when they are used
[148]
properly
they place the risk with the party who's
[150]
responsible unfortunately they're often
not used properly
[154]
by assigning all the risk to the project
participant who has the least amount of
[158]
leverage in negotiations
subcontractors are prime targets for
[162]
these type of misuse of clause
one way to avoid risk from this clause
[166]
is to only agree to indemnify
demand or hold harmless where you have
[170]
control over the potential losses and
damages
[174]
third right to withhold payment the
owner's right to withhold payment for
[179]
work is there to protect the owner
these clauses usually refer to
[183]
withholding payment for delays
potential liability claims work that
[187]
doesn't meet contractual specification
and other risk, however owners usually
[191]
have some protection in the form of
retainage
[194]
so the right to withhold payment should
be limited to very specific situation
[198]
contractors should also make sure that
the contract language does not allow
[202]
withholding payment for anticipatory
breach of the contract
[206]
four reasonably informal there is a
practice in construction contract law to
[211]
use the term reasonably informal
in the general conditions portion of the
[215]
contracts this relates to the design
documents and appears in the contracts
[219]
to acknowledge
that design documents are never perfect
[223]
it is up to the people doing the work
to construct a project that sustainably
[227]
matches the design intent
so if a drawing is showing a door it is
[231]
up to a contractor to include a frame
with the door even though frame might
[235]
not be shown on the drawings
the contractor can reasonably infer that
[239]
the door should have a frame
problems usually come up when the design
[243]
documents are so incomplete that
contractors has to begin drawing too
[247]
many inferences
the result is the contractor starting to
[250]
construct on the fly with the materials
and methods
[253]
that might not match with the intent of
the design or the contractor begins to
[257]
rely on change orders to cover
mounting unforeseen costs the best
[262]
defense against falling for this clause
is to do a thorough review of the design
[265]
documents
looking for completeness and
[268]
constructability if the design does not
pass your basic evaluation
[272]
then not getting involved in the project
might be the best decision
[276]
another option is to try to work out the
design concerns
[279]
before the final bit this is not a
complete list of contract clauses that
[284]
could cause
problems for construction businesses and
[287]
is not a legal advice
but by being aware of these clauses and
[290]
their potential setbacks could save you
some money
[293]
to put yourself in the best position
always consult legal counsel
[297]
when you're considering signing a
[302]
contract
Most Recent Videos:
You can go back to the homepage right here: Homepage