The Beneficiaries of “Pay-if-Paid” Clauses in Construction Contracts

While the law of contract formation allows parties “freedom to contract”, in construction law, general contractors have largely negotiated a shift in the distribution of risk to the subcontractor with the inclusion of “pay-if-paid” contractual clauses that make the general contractor’s receipt of payment from the owner a condition precedent to the ultimate payment to the subcontractors. CONTINUE READING...

Calculating Contractor’s Damages Under a Partially Performed Construction Contract

Since the work was two thirds complete at the time of termination, your thought is to take two thirds of the entire contract amount, subtract out payments received to date, and present this figure as your recoverable damages. Is this approach, which is known as the percentage of completion method, the correct one? CONTINUE READING...

Forum Selection Clauses – Mandatory v. Permissive

With forum selection clauses, “shall” doesn’t always mean “shall.” If a forum-selection clause containing the word “shall” lacks additional exclusive language like “exclusive,” “sole,” or “only,” a court may find that clause to be permissive. CONTINUE READING...

Who’s Bound by a Forum Selection Clause? Contractors, Subcontractors, and Sureties?

Could a party end up litigating related claims in two separate forums if not all parties are bound by a forum-selection clause? To ensure efficiency and avoid inconsistent verdicts, all intertwined claims should be litigated together in the same forum, writes Sarah D. Rodriguez. CONTINUE READING...

Contractors: “Did I Just file a Fraudulent Claim…What’s My Exposure?

Mechanics’ liens are a great tool available to contractors, subcontractors, suppliers, and laborers to ensure payment for work, materials and/or services provided. However, filing a fraudulent lien has costly consequences, including jail time. CONTINUE READING...