Protections Provided to New York Architects and Contractors under the Economic Loss Rule

THE ECONOMIC LOSS RULE IN NEW YORK CONSTRUCTION CONTRACTS:

WHAT IT IS AND HOW IT MAY BENEFIT CONTRACTORS AND ARCHITECTS

The “economic loss rule” is a rule that New York courts use to prevent a plaintiff from recovering against a defendant for a tort (usually negligence), when the essence of the plaintiff’s claim is for failure to live up to the terms of a contract.

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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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Construction Law: An Overview for Homeowners; Part 4 of 4 – Conclusion

This is a continuing article series regarding Construction Law: An Overview for Homeowners. These include four different topics, Pre-Construction (Part 1), During Construction (Part 2), Post-Construction (Part 3) and Construction Conclusion (Part 4). Each series of topics discuss informative summaries of what happens within each construction phase.

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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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Subcontractor’s Arbitration Action Stayed by Supreme Court

The Supreme Court, New York County, recently clarified the impact of contractual language specifying litigation as the forum for resolution in the subcontract, and impact of New York’s Prompt Payment, providing for arbitration of disputes where it applies.

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Top 5 Mechanic’s Lien Waiver Pitfalls for Contractors and Subs

For contractors and subcontractors in New York, Mechanic’s Lien Waivers are a part of life, but the potential risks to the contractor in waiving more than intended or understanding of the terms are not always as common. Owners (and often their lender) require that the project be kept lien free through progression of the work to final completion.

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The Implied Warranty on the Sale of New Homes: What Homeowners & Contractors Need to Know

The traditional maxim of “let the buyer beware” is softened in the context of Article 36-B of the New York General Business Law, which imposes a warranty in favor of the buyers of new homes and holds construction contractors to a standard of skilled workmanship.

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Blending of Public and Private Construction – Proceed With Caution

Traditionally, New York Construction Law sets separate rules of engagement for public projects (where the owner is a public entity) and those that are private construction projects (where the owner is a private individual or corporation). Given these two distinct camps, it has been easy to classify a project as either a public project or a private one. For contractors, subcontractors and suppliers, knowing which rules of engagement pertain to them is essential to avoid making costly mistakes.

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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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