Cut through the legalese to truly understand construction law Smith, Currie & Hancock's Common Sense Construction Law is a guide for non-lawyers, presenting a practical introduction to the significant legal topics and questions affecting the construction industry.

Preface xxvii Author Biographies xxix 1 The Legal Context of Construction 1 I. Introduction 1 II. Contract Law 1 III. Evolution of Construction Law 4 IV. Torts 5 V. Statutory and Regulatory Laws Affecting the Business of Construction 8 2 Interpreting the Contract 12 I. The Importance of Contract Interpretation 12 II. What Is a Contract ? 12 III. The Goal of Contract Interpretation 13 IV. Defining Contract Terms 14 V. Interpreting the Contract s Wording 15 VI. The Facts and Circumstances Surrounding Contract Formation 17 VII. Resolving Ambiguities 20 VIII. Implied Contractual Obligations 21 IX. Contractual Obligations Arising by Operation of Law 26 3 Alternative Contracting Methods 28 I. Traditional Approach to Construction: Advantages and Disadvantages 29 II. Multiprime Contracting and Fast-Tracking 30 III. Construction Management 32 IV. Design-Build Contracting: What Works to Avoid Disputes 36 V. Design-Build Aspects of Traditional Construction 46 VI. Contractor Liability Issues 50 VII. Engineer-Procure-Construct 52 VIII. Building Information Modeling 56 4 Public-Private Partnerships 61 I. The P3 Alternative 63 II. P3 Project Participants 71 III. P3 Financing Strategies 76 IV. P3 Risk Allocation 82 V. Conclusion 85 5 International Construction Contracts 87 I. Unique Issues 87 II. Project Delivery Methods and Contract Forms 89 III. Dispute Resolution 102 6 Working in a New State: Pre-proposal and Performance Considerations 108 I. Qualifying to Do Business 108 II. State Registration Requirements: Bonds to Secure Payment of Taxes 110 III. State Licensing and Qualifications 110 IV. State and Local Laws Governing Construction 112 V. Public-Sector Construction (State, Local, and Federally Funded State and Local Projects) 114 VI. State Statutes and Policies Affecting Contractual Relationships and Terms 117 VII. Preservation of LienBond Rights 123 VIII. Project Risk Assessment Foreign States 126 IX. Information Sources 127 Appendix 6.1 Checklist: Projects in Foreign States 129 7 Competing for the Contract 133 I. Introduction: Transition from Sealed Bids to Negotiated Best-Value Awards 133 II. Key Concepts in Traditional Public Competitive Bids Responsiveness and Responsibility 134 III. The Lowest and Best Bidder 140 IV. Negotiated Best Value Selection Process 143 V. Electronic Bids 145 VI. Reverse Auctions 147 VII. General Considerations When Competing on Private Contracts 148 VIII. Effect of Past Performance Evaluations on Award Process 149 IX. Contractor Bid Mistakes 157 X. Bid Protests on State or Local Government Contracts 162 XI. Bid Bonds 165 XII. Bid Shopping : What Is the Obligation of the Prime Contractor to the Subcontractor Submitting the Lowest Price? 167 XIII. Holding Subcontractors and Vendors to Their Bids 170 XIV. Statute of Frauds Issues 173 XV. Damages 174 8 The Uniform Commercial Code and the Construction Industry 177 I. Applicability to Construction Projects Purchasing Equipment and Materials 177 II. Determining When Article 2 Applies 178 III. Modifying U.C.C. Obligations 179 IV. Contract Formation under the U.C.C. 179 V. Risk of Loss 183 VI. Inspection, Acceptance, Rejection, and Revocation of Acceptance 184 VII. Warranties under the U.C.C. 188 VIII. Statute of Limitations and Commencement of the Warranty Period 190 IX. Performance Issues 192 9 Authority and Responsibility of the Design Professional 199 I. Overview 199 II. Standard of Care, Professional Responsibility, and Liability 200 III. Authority of the Design Professional 208 IV. Administrative Functions of the Design Professional 211 V. Other Duties of the Design Professional 224 VI. The Design Professional s Liability to the Contractor and Third Parties 225 VII. Statutes of Repose 232 VIII. Effects of Contractual Limitations on Design Professional Liability 234 IX. Assumption of Design Liability by the Contractor 238 X. Shared Responsibility and Risk 241 XI. The Design Professional s Copyright for Design Documents 243 10 Subcontract Administration and Dispute Avoidance 248 I. Dispute Avoidance Begins at the Bidding Stage 248 II. Preparation of the Subcontract Agreement 254 III. Should Subcontractors Be Bonded? 277 IV. Dispute Avoidance by Diligent Project Administration 278 11 Contract Changes 291 I. What Is a Changes Clause? 291 II. Recovery under the Changes Clause 297 III. Who Is Authorized to Order Changes? 300 IV. Written Documentation of Changes 303 V. Constructive Changes 308 VI. Cardinal Changes 314 VII. The Impact of Numerous Changes on Unchanged Work 316 VIII. Impossibility Impracticability 317 12 Differing Site Conditions 320 I. Differing Site Condition Defined 320 II. Responsibility for Differing Site Conditions 320 III. Standard Industry Differing Site Conditions Clauses 321 IV. Comparison of DSC Provisions 330 V. Operation of the Differing Site Conditions Clause 332 VI. Stumbling Blocks to Recovery 343 VII. Relief in the Absence of a Contract Provision 351 Appendices Site Investigation Checklists 356 I. General Notes 356 Appendix 12.1 Project Checklist: Qualifying the Site 357 Exhibit A: Site Investigation Record 358 Appendix 12.2 Pre-Bid Environmental Considerations 360 13 Schedules, Delays, and Acceleration 362 I. Allocating the Risk of Performance Time in the Contract 363 II. Use of Schedules in Project Management 369 III. Analysis of Project Delay 372 IV. Typical Causes of Compensable Delay 375 V. Concurrent Delay 382 VI. Excusable but Noncompensable Delays 383 VII. Acceleration 385 VIII. Contractual Limitations to Recovery for Delays 388 IX. Owner Claims for Delay 391 X. Delay Claims and the Use of CPM Schedules 392 XI. Documentation to Support Delay Claims 394 14 Inspection, Acceptance, Warranties, and Commissioning 399 I. Inspection 400 II. Acceptance 413 III. Contractual Warranties 420 IV. Project Commissioning and Post-Acceptance Facility Operations 425 15 Management Techniques to Limit Risks and Avoid Disputes 431 I. Construction: A Risk-Prone Business 431 II. Qualifying the Project and the Participants 432 III. Defining Rights, Responsibilities, and Risks: Parties and Their Contracts 439 IV. Contract Framework 441 V. Avoiding and Preparing for Disputes through Proper Management and Documentation 445 VI. Prudent and Responsible Estimating 446 VII. Establish Standard Operating Procedures 447 VIII. Establish Lines of Communication 447 IX. Project Documentation 448 X. Electronic Communications on Construction Projects 455 XI. Cost Accounting Records 459 XII. Monitoring the Work through Scheduling 460 XIII. Preserving Electronically Stored Information 461 XIV. Conclusion 462 Appendix 15.1 Consensus Docs 221 Contractor s Statement of Qualifications for a Specific Project 465 Appendix 15.2 Logs and Forms 475 Appendix 15.2A Format for Notice Checklist 476 Appendix 15.2B Sample Partial Notice Checklists 478 Appendix 15.2C Forms 482 Appendix 15.2D Request for Information 487 Appendix 15.2E Telephone Conversation Memorandum 488 Appendix 15.2F Sample Daily Report 489 Appendix 15.2G Notice of Backcharge 490 Appendix 15.2H Field Order Status Chart 491 Appendix 15.2I Log: Incoming Correspondence 492 Appendix 15.2J Log: Outgoing Correspondence 493 16 Payment Bonds 494 I. Payment Bonds Required by Statute 495 II. Payment Bonds on Private Projects 501 III. Who Is Protected by Payment Bonds 501 IV. Work Qualifying for Payment Bond Coverage 507 V. Recovery under Payment Bonds for Extra Work, Delay Damages, or Lost Profits, and Other Costs 510 VI. Distinguishing between Payment Bond Claims and Performance Bond Claims 513 VII. Procedural Requirements 513 VIII. Effect of Payment Bonds on Lien Rights 517 IX. The Surety s Defenses to Payment Bond Liability 518 17 Performance Bonds and Terminations 522 I. Surety Performance Bonds 522 II. Termination 540 18 Proving Costs and Damages 558 I. Basic Damage Principles 558 II. Methods of Pricing Claims 565 III. Contractor Damages 568 IV. Owner Damages 584 19 An Overview of Environmental and Safety Concerns on the Construction Site 593 I. Sources of Environmental Regulation and Liability 593 II. Minimizing Environmental Risks Prior to Contracting 603 III. Management Techniques for Environmental Risks during Contract Performance 609 IV. Mold: Developing a Program to Limit Liability 611 V. Environmentally Friendly Construction: Green Buildings 613 VI. Construction Safety 617 20 Construction Insurance 627 I. Importance of Insurance Planning 627 II. Introduction to the Language of Insurance Policies 628 III. Types of Insurance 630 IV. Contract Requirements for Insurance 637 V. Prompt Action to Protect Potential Coverage 640 VI. Insurer s Response to Claims 641 VII. Routine Coverage Issues 643 VIII. Concurrent Causes 650 IX. Construction Insurance and Mold Claims 651 21 Labor and Employment Issues Affecting the Construction Industry 658 I. Immigration Issues 658 II. Employee Safety and Health 664 III. Wage and Hour Requirements 665 IV. Employee Benefits: ERISA 676 V. Employment Discrimination 677 VI. Family and Medical Leave Act 687 VII. Union Activity 689 VIII. Utilizing Employee Background Investigations 693 IX. Workers Compensation Exclusive Remedy Assertions 695 22 Bankruptcy in the Construction Setting 698 I. Introduction 698 II. The Players 698 III. Key Terms 699 IV. Bankruptcy Code 701 V. Status of the Debtor s Contracts 710 VI. Status of Materials and Equipment 715 VII. Status of Contract Funds 718 VIII. Other Sources of Funds 723 23 Resolution of Construction Disputes 730 I. Early Claim Recognition and Preparation 731 II. Early Involvement of Experts and Attorneys 732 III. Demonstrative Evidence 734 IV. Contemporaneous Records 735 V. Components of a Well-Prepared Claim Document 736 VI. Calculating and Proving Damages 738 VII. Pursuing Negotiation and Settlement 739 VIII. Arbitration 743 IX. Litigation 755 24 Federal Government Construction Contracting An Overview 764 I. Introduction: The Key Differences 764 II. Contractor Selection 770 III. Social-Economic Policies 778 IV. Resolution of Contract Disputes 800 V. Standards of Conduct for Contractors 811 Appendix A Basic Internet Resources and References Federal Government Construction Contracts 818 I. System for Award Management (SAM) 818 II. Fed Biz Opps 818 III. Information on Regulations and Agencies 818 Reference Materials 819 Index 821