Contract Disputes

Broken contracts are a fact of life in the construction industry. Construction projects differ in complexity, and often involve the coordination of many different trades over the course of many months (and sometimes years), where each subcontractor is dependent upon many others in order to have access to the worksite. During the life of a construction contract, countless issues may arise that affect work at the site: unforeseen conditions, weather, engineering problems, materials shortages, manpower disruptions, financial considerations that interrupt the flow of payments, and even terrorist incidents. All too often, individual participants in a construction project fail to do what the contract requires: payments are late or never arrive, work is not done as required, or not at all. Sometimes, the failure to perform the contract is caused by forces beyond the control of any one party. In such circumstances, it’s best to get the help you need from an experienced Los Angeles Contract Dispute Attorney.

Given that no one can draft a perfect contract which anticipates every possible contingency, and fairly allocates responsibilities between the parties, from time to time disputes arise over the performance of construction contracts during construction which must be addressed quickly to ensure the best outcome. Delay causes loss of profits, triggers liquidated damages, and causes further delays, resulting in a cascade of losses throughout the project. Hunt Ortmann’s experienced attorneys are acutely aware of the need to minimize damages during ongoing projects, while at the same time protecting our clients’ rights to secure their contractual rights. We strive to get all of the parties to the table early to discuss interim steps to keep projects going, so as to avoid unnecessary additional further losses; and to preserve evidence to ensure a fair final resolution at the conclusion of the project.

CHANGE ORDERS & EXTRA WORK CLAIMS

Regardless of the nature of the construction project, whether it is a traditional design-bid-build project, a design-build project, or involves some hybrid for project delivery, the vast majority of projects involve requests for different materials or work, and for additional materials or work. Most construction contracts set out very specific written procedures for requests for changes and extra work, which, if not followed, will result in payment problems or nonpayment for the additional materials and work. Oftentimes, while a project is ongoing, urgent requests are made, changes are approved, work is performed, but contractual niceties, such as the need for clear written requests and approvals, are ignored. Hunt Ortmann’s experienced lawyers understand the importance of change order and extra work clauses, the need for written authorization, and when the law will enforce oral contract modifications. We can assist you to comply with contract requirements so that you get paid for changed and extra work. We can also help you to avoid the pitfalls of performing work without written change orders and approvals, while minimizing delays and friction at the worksite.

SCOPE OF WORK

Occasionally, disputes arise over the nature or extent of a party’s responsibilities under a construction contract, either because the contract fails to address important aspects of work to be performed, or because something unexpected occurs. Sometimes, disputes arise after a job is completed as to which trade is responsible for problems or defective conditions identified by inspectors or potential purchasers. Regardless of when disputes over scope of work arise, it is crucial for all of the affected parties to quickly address the issues and come to agreement regarding interim solutions to minimize delays, interference with the work of others at a jobsite, or preventing the sale of the property. Hunt Ortmann has attorneys with extensive experience handling scope of work disputes, both as advocates for individual parties, and as neutrals elected as the mediator or arbitrator to assist the parties to resolve disputes quickly. We understand how construction projects work, and strive to keep people working at the jobsite while working through disputes.

CHANGED CONDITIONS CLAIMS

Hunt Ortmann’s attorneys know that construction budgets, bids, and final contracts depend on accurate preparation of reports relating to the history of the site, geological and soil conditions, and placement of existing improvements. Encountering changed conditions at a construction site can be the death knell for any project, and at the very least, will require significant additional expenditures. Our attorneys have extensive experience handling claims related to differing site conditions, and the effect such new conditions have on existing contracts. We help our clients identify who is responsible for the new conditions, and to seek additional compensation for the added work resulting from unexpected obstacles to construction.

DELAY/ACCELERATION/DISRUPTION CLAIMS

Time is money, particularly in the construction industry. In an effort to trim construction costs, and to keep the side effects of construction (the noise, visible mess, and the additional or rerouted traffic) to a minimum, owners and developers often require construction schedules that are very tight and have little built in flexibility for handling the unexpected. Contractors need to keep their work crews busy in order to make money, and access to the jobsite is often limited based on when other trades will have their work completed. When the unexpected occurs, such as bad weather, earthquakes, work accidents, shortages of labor or materials, unanticipated underground conditions like water, ancient artifacts or bones, or permitting problems – the schedule suffers, causing a ripple of delay throughout the project.

Acceleration, the flipside of delay, is equally expensive to owners and contractors alike. Hunt Ortmann attorneys know that compressed construction schedules are fragile and easily disrupted – resulting in reduced access to the jobsite, spiraling delays, and escalating costs. Whether acceleration occurs at the outset of construction, or is employed to “catch up” and get a project back on schedule, acceleration is an expensive proposition that often creates disputes as to who is responsible for the added costs. Our attorneys have experience sorting out the facts and identifying the actual causes for the added costs. We can seek compensation for costs incurred from schedule busts.

INEFFICIENCY CLAIMS

Delays and unanticipated conditions can lead to inefficiency which increases costs and cuts into profitability. Hunt Ortmann’s attorneys understand that inefficiency is usually caused by external factors, such as when the subcontractor or trade cannot get sufficient access to the work site so as to get work done quickly and in a manner that efficiently utilizes the available work force or slowed work where employees are forced to compete for work space with other trades. Once a construction schedule is approved and construction commences, there is little any one trade can do to improve schedule or working conditions at a job site. Our attorneys can assist parties to a dispute accurately document the situation and costs associated with inefficiencies during the course of construction, identify the causes of inefficiency, and can seek to recover the additional costs incurred as a result of inefficiency on a project.

WARRANTY/GUARANTY

Most construction contract documents include extensive warranties and guarantees which require a contractor or subcontractor to supply specific materials and equipment, of a specified quality, and to correct any work which does not strictly conform to contract documents. Hunt Ortmann attorneys know that contract documents often include undefined or conflicting terms and requirements. When disputes arise concerning contract interpretation, the scope of a warranty or guaranty, and whether work performed meets contract specifications or must be replaced, we can help protect you, to ensure that unnecessary “corrective” work is not required, and to secure proper compensation for work which satisfies contract documents.

FINANCIAL ISSUES

Experience has taught us that financial issues are a major cause of contractual breaches: Lenders withdraw funding for projects leaving owners, contractors and subcontractors marooned mid-project; Monetary policies create credit crunches resulting in unanticipated higher interest payments. Carefully drafted contract provisions as well as other financial assurance measures like bonding or guarantees can help mitigate any unforeseen disruption in payment.

LIQUIDATED DAMAGES

Assessment of liquidated damages can result in withheld payments, escalating losses on a project, and even bankruptcy. However, it is often difficult to foresee what specific conduct triggers the assessment of liquidated damages, particularly where any given subcontractor’s work is dependent upon completion of work by other trades and adequate planning by the owner and its management team. Liquidated damage clauses are a part of doing business for public works projects and many large private construction projects. Hunt Ortmann’s attorneys understand the law governing enforcement of liquidated damages clauses: when liquidated damages may be assessed, limitations as to the amount of liquidated damages which are proper, and when enforcement of liquidated damage clauses is not allowed. We help our clients navigate the murky waters surrounding the assessment of liquidated damages and minimize assessed liquidated damages. Construction contracts can be complicated and full of contradictions. We can help you to better understand your contract so as to anticipate when liquidated damages may be assessed, and to avoid assessments while you are performing your work.

If any of these potential issues relate to a case you are involved with, don’t hesitate to contact the expert construction attorneys of Hunt Ortmann.