Prime contractors and subcontractors sign contracts obligating them to defend, indemnify and insure the upstream contracting parties, owners in the case of prime contractors and the prime contractor in the case of subcontractors. Sometimes where an owner blames a contractor for damages, multiple subcontractors are involved. In that case, the prime contractor appoints one defense counsel to defend the prime contractor in the dispute and the costs of defense of the prime contractor might be shared among the various subcontractors’ insurers. If, for some reason, a subcontractor’s insurer is not paying or is slow in paying the prime contractor’s attorneys’
MROWIEC Construction managers and general contractors frequently include provisions in trade contracts and subcontracts granting the construction manager and general contractor discretion to modify the schedule and sequence of the trade contractors’ or subcontractors’ work. Those provisions usually then go on to preclude or limit any additional compensation for the change in schedule or sequence. As one court recently observed: “It is completely reasonable that a construction manager should have total and complete control over a project schedule, along with the ability to change the schedules of trade contractors so as to effectively manage the project.” Electric Machinery Enterprises Inc.
MROWIEC Most construction contracts or construction supply agreements contain required completion or delivery dates. Some also incorporate a construction schedule. But some contracts neither provide a specific, firm completion date nor expressly incorporate any construction schedule. If an agreement does not provide a completion date or does not incorporate a schedule, may a construction schedule nevertheless assist in determining a party’s timeliness obligation? That issue was addressed in the recent case of International Production Specialists, Inc. v. Schwing America, Inc., 2009 U.S. App. LEXIS 19842 (7th Cir. Sept. 2, 2009). In Schwing America, Volst-Alpine Industries, Inc. acted as general contractor
Owners often require that contractors procure performance bonds to guarantee the contractor’s faithful performance of the contract. Statutes require performance bonds on public construction projects. MROWIEC The performance bond surety’s liability to the owner for the contractor’s failure to complete the contract is not controversial. Absent defenses, the surety must either complete the contract or pay the penal sum of the bond. But what if the contractor apparently completes the contract successfully, the standard contractual warranty passes without discovery of any defect and one is discovered during the longer period of an extended contractor’s warranty required by the contract and
Changes are a fact of life in design and construction. Written contracts typically require that the changes are not valid unless formalized in writing and signed by an authorized agent of the owner. Frequently, though, to advance progress, contractors or design professionals proceed on oral authorizations or letters signed by an owner’s employee. MROWIEC For private contracts, the courts have recognized that parties can waive the contract’s formalities regarding the need for written change orders by their course of conduct. See, e.g., Tados v. Kuzmark, 660 N.E.2d 162, 170 (Ill. App. Ct. 1995). A recent case reminds us that public