Changes vs. Cardinal Changes: The Limit of Construction Contract Changes


Changes are an unavoidable aspect of construction. Although thorough effort and coordination are required in preparing the original project contract, specifications and construction drawings, there will still be changes. This is why owners are provided the right to make changes to the work under a typical contract changes clause.

However, the ability for owner requested changes, even if provided in the contract, are not without limitations, restrictions, and consequences. After all, what purpose would any of the project documents, contracts and drawings serve if they were subject to constant change? What good would the contract serve if the owner could make any change(s) without consequence?

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Punitive Damages Claims in New York Construction Contract Disputes

One topic that came up in my practice recently was a contractor’s potential exposure to liability for punitive damages under New York law. As the name suggests, punitive damages are awarded above and beyond their contract or property damages, ‘where the wrong done was aggravated by circumstances of violence, oppression, malice, fraud, … on the part of the defendant, and are intended to address the plaintiff’s mental anguish or other aggravation, to punish the defendant for its behavior.’ Black’s Law Dictionary 390 (6th Ed. 1991).

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Appellate Court Upholds Contractor Indemnification

Indemnification is an important legal concept which impacts nearly all construction contracts. It has several forms and types, but generally amounts to a contract requirement where one party party agrees to restore the other party from any losses. Where an anticipated loss should occur, the damaged party can expect reimbursement for the loss.

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Alternative Dispute Resolution An Option For Construction Contractors Under NY’S Prompt Payment Act

Perhaps the most common construction-related dispute is the refusal of a party to make payment to its contractors or subcontractors. While litigation is the traditional avenue for resolving such disputes, methods of alternative dispute resolution such as arbitration and mediation are enjoying growing importance in the field of construction law.

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Top 7 Owner Risks in New York Construction Contracts

Construction is fraught with countless risks, from weather conditions, labor strikes, material unavailability, subsurface conditions, and inaccurate plans and specifications, among others. Each has the potential to delay the project, cause increased completion costs, and increase the likelihood of disputes, liens, and litigation.

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NY Supreme Court Strikes Contractor Liability Limitation Provision

Many contractors and subcontractors go about their work feeling protected from claims for damages because their agreements contain certain exclusions. Some of these agreements will even have language stating ‘Not responsible for [X, Y, and Z]’. But the ruling handed down February 14, 2012, by the Supreme Court, Nassau County serves as a reminder that contractual indemnity provisions are more of a privilege than a right, and are not subject to enforcement automatically.

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Construction Contract Document Conflict

 

 

Given the large number and variety of documents required to administer a construction project today (plans, specifications, contracts, etc.), the likelihood of discrepancies arising between these different sources is almost unavoidable.

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Contractors in New York may not be bound by Architect Certifications

 

Construction contracts in New York often place the architect or engineer in the additional role of an initial impartial decider as to any disagreement or disputes between the contractor and the owner, in addition to their roles as the design professionals.

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Construction Warranty vs. Statute of Limitations Between Builder and Owner

 

Like the strings of a marionette puppet, after the completion of a New York construction project there are various legal theories that serve as ties between the builder and the owner. For the builder, the sooner these lingering ties can be removed the less exposure they face for claims of defects. For the owners, the longer they are able to establish these connections the longer they may have legal recourse against the builder for defects, should that be necessary.

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Essential Provisions for Subcontractor Agreements

 

When it comes to subcontractor agreements, there are numerous types of agreements that might be used and the fine print in these agreements can be crucial. Some documents, such as the American Institute of Architects (AIA) 401 and the Associated General Contractors of America (AGC) Form 640 serve as standard forms of agreement.

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