weeks. The owner wants to keep the schedule, so it pressures you
to accelerate your work, which often costs more (sometimes timeand
a-half or more) and decreases efficiency for a whole host
of reasons beyond your control. You tell your customer that the
impacts of these changes are costing you money. Sometimes the
customer will negotiate for change orders that put some money in
your pocket – particularly if it can take the money out of the pocket
of another contractor who interfered with your work. Sometimes
the customer will tell you that your contract doesn’t provide you
with a remedy and to go pound sand.
Maybe your contract doesn’t provide a remedy. But even if it
does, the expense of pursuing such a claim can be cost-prohibitive.
I’ll never forget my first exposure to an impact claim. Representing
the owner on its multi-prime project, we received from the electrical
contractor’s attorneys a lawsuit accompanied by a two-inch
thick booklet with all sorts of charts and graphs and a narrative
explaining why the contractor should be paid an additional
$250,000 at the conclusion of the project for “cumulative” delay
and acceleration damages resulting from numerous change orders
it had already signed fixing the price of each additional task it had
performed. I imagined that it must have cost at least 10 to 20% of
the total claim ($25K to $50K) just to put that booklet together –
and that was upfront money just to get started.
After examining the change orders and the contract for our client,
we concluded that the electrician didn’t have much of a case
because, as mentioned above, it had already signed the change
orders fixing the price for each task it had performed. We ended
up settling the case for less than the anticipated cost of the booklet,
much less the attorneys’ fees involved.
To be sure, if you are involved in cases in which the amount in
controversy is mid-seven figures and up, the legal and expert fees
needed to litigate such disputes may be a relatively small percentage
of the sum sought. But for more than a few contractors reading
this, the dollars required to be paid upfront to assert such a claim
makes it impossible to assert such claims. I have noted little progress
on this front, but when I come up with an idea, PDCA will be
among the first to know. t
James Dash is an attorney with Carlson Dash and is licensed in
Illinois, Texas and Wisconsin.
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CONSTRUCTION LAW
Many contractors either don’t
bother to learn the tools that
are available to them or, when
they do learn, defer using
them until it’s too late … When
this happens, the contractor’s
legal rights become useless.
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