Termination for Cause vs. Convenience

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There may come a time during the course of a construction project when a contractor’s relationship is terminated. There are a number reasons this may occur such as:

  • The contractor’s financial trouble
  • Disputes regarding the quality of the work
  • Failing to adhere to the contract documents, or project schedule
  • Failing to pay trade contractors and material suppliers    

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Topics: construction contract, Surety

Risks Associated With Contracted Sole Proprietors

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Owners, General Contractors, Developers, and even Trade Contractors take on a certain amount of risk when hiring any contractor, regardless of the business type. These risks typically include Liability Risk, Work Quality or Completion, Contractor Default, Bankruptcy, Insolvency and even the ceasing of operations. These are only a few that must be considered when hiring a contractor.

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Topics: Risk, construction contract, Sole Proprietor, Contractors

The Reality of Public-Private Partnerships (P3's)

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State and Federal deficits are ballooning at an alarming rate, and maintaining the Infrastructure hasn’t yet become a priority. Politicians are struggling to find the balance between the need to fix our infrastructure and how to fund the costs.

In recent years, a solution to this struggle is Public-Private Partnership (P3’s). This is a partnership where the Public Entity outsources the responsibility of building and/or maintaining an Infrastructure asset to a Private For-Profit Company.

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Topics: construction contract, public-private partnership

Contractual Risk Transfer - 3 Tips for Trade Contractors

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Did you know the construction contract you signed contained a clause that transferred any risk from the project owner or general contractor to your company? Such clauses are common in executed contracts. Their purpose is to transfer any risks on a construction project from one party (transferor) to another (transferee) in order to eliminate the transferor’s exposure to risk. This legal practice is known as contractual risk transfer. 

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Topics: construction contract, Risk Management, Contractual Risk Transfer

What Does that Indemnification Clause Mean in Your Contract?

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All contractors know there are significant risks on every project that are inherent in the construction industry. A contractor's potential risk exposure may be significantly increased through the inclusion of an indemnification clause--also known as a hold harmless clause--in its contract with the owner.

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Topics: construction contract, Indemnification

Liquidated Damages vs. Consequential Damages

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The construction industry has its fair share of legal terms, especially when it comes to contracts. Some important ones to understand are those associated with monetary damages. Monetary damages are a sum of money paid as compensation to an injured party by the party at fault or liable for the injury.

While liquidated damages and consequential damages are two of the most common issues negotiated in construction contracts, they are most often misunderstood. Let’s take a closer look at them.

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Topics: construction contract

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