When entering into a commercial construction contract to build a commercial building, landowners should be aware of certain contract issues that can cause future legal problems. This article is designed to address some of the more common issues seen in commercial construction contracts, and what landowners should pay attention to before entering into any contracts for the construction of a commercial building.
Under Florida law, individual design professionals can be held liable for professional negligence, even if they did not personally contract for the professional services. Moransais v. Heathman. Moreover, Florida’s statutes governing engineering, architecture and geology make clear that individual design professionals are not automatically absolved of liability simply because they are not parties to a contract.
There are many options for a contractor to deliver a project to a commercial owner. As with each different project, the delivery method can change to suit the needs of the parties. Careful attention should be taken when analyzing which method works for the particular project. Each of these various project delivery methods carry differing risks for the parties involved (i.e. owner, contractor, subcontractors, etc.). This two-part blog discusses some of most common project delivery methods for commercial construction projects. Part I discussed Design Build methods and Construction Manager at Risk. This part II will address some trending project delivery methods.
Performance bonds on a construction project can be a valuable asset. However, the language of the bond may be filled with traps for the unwary. A bond obligee must be careful to strictly comply with the bond language, or else the bond protection may be lost—which can be a very bad thing. A recent case, Arch Ins. Co. v. John Moriarty & Associates of Florida, Inc., 15-22403-CIV, 2016 WL 7324144 (S.D. Fla. Dec. 12, 2016), highlights how a bond obligee can lose its bond protection by failing to strictly comply with the bond language… and it cost the bond obligee One Million Dollars. Failure to understand and strictly comply with the bond language can be costly.
There are many options for a Contractor to deliver a project to a commercial owner. As with each different project, the deliver method can change to suit the needs of the parties. Careful attention should be taken when analyzing which method works for the particular project. Each of these various project delivery methods carry differing risks for the parties involved (i.e. owner, contractor, subcontractors, etc.). This two-part blog will discuss some of the most common project delivery methods for commercial construction projects. Part I will discuss Design Build methods and Construction Manager at Risk.
Florida construction lien law allows certain parties who perform construction work to record construction liens if they are not paid. A construction lien is proper when a lienor has not been paid for labor, services, materials or other items furnished in connection with a construction project. Sometimes, however, when a construction lien is recorded, an owner or contractor, subcontractor or sub-subcontractor may argue the construction lien is fraudulent. A party that records a fraudulent lien can be subject to punitive damages, attorneys’ fees, and felony charges.
A payment bond is a security posted by the general contractor that ensures that payments will be made to subcontractors, sub-subcontractors, and material providers for services or products provided on private and public construction projects. The amount posted to exempt the owner needs to be in at least the amount of the original contract. While payment bonds are most commonly associated with public projects, which are governed by Chapter 255 (“Florida’s Little Miller Act”), Chapter 713 governs payment bonds on private construction projects. In such case, there are two types of bonds that can be obtained to exempt an owner. This blog post will cover general considerations for unconditional and conditional payment bonds.
When a party breaches a contract and the contract does not contain a valid liquidated damages clause, the non-breaching party may be entitled to compensatory damages. The appropriate measure of damages arising from a breach of an enforceable contract is usually “the difference between the value expected from the contract and the value actually received by the non-breaching party.” Tenn. Gas Pipeline Co. v. Technip USA Corp., 2008 WL 3876141, at *5 (Tex. Ct. App. 2008). Actual damages flowing from the breach of contract are either “direct” or “consequential.” Direct damages are those that flow naturally and necessarily from the breach and compensate for loss that is presumed to have been foreseen or contemplated by the parties because of the breach. Id. Examples of direct damages include unpaid contract amounts, cost to repair defective work, and reduced project value due to nonconforming work. Consequential damages are damages that “do not necessarily, but do directly, naturally, and proximately result from” the injury for which compensation is sought.
Ownership of waterfront property is very desirable in Florida and often involves unique real property considerations. But when we discuss waterfront property in Florida, one of the most attractive and most sought-out features is an incredible water view. When it comes to private waterfront property ownership, it can be difficult to distinguish where the private land rights cease and the sovereign land ownership begins. More difficult is when your neighbor begins construction or activity that actually blocks your waterfront view. As a result, a subset of real property law has emerged to address what is called “riparian rights.”
A recent federal appellate decision examined an issue regarding private construction projects on public land in District of Columbia v. Department of Labor, 819 F.3d 444 (D.C. Cir. 2016). In this particular case, the district court and the appellate court involved refused to extend the application of the Davis-Bacon Act to the project in question. With the 2016 presidential election about a month away, this recent decision is important in the context of the construction industry because the administration that wins the election—depending on their labor stance—may push for more or less application of the DBA through the Department of Labor, an executive branch agency. Moreover, given the decision of the court, legislators running for election or reelection to Congress may have labor stances that should be examined by those interested in this issue and decision. This blog examines the opinion of the court and its reasoning in reaching its decision in this case and also comments on why this case is of importance to the construction industry.