Sunday, January 11, 2009

CONSTRUCTION LAW - CONTROVERSIES; BACKCHARGES, EXTRAS

CONSTRUCTION LAWLETTER
For Industry Professionals, Officers, Managers, Trades and Suppliers
J. NORMAN STARK, ATTORNEY and REGISTERED ARCHITECT
JURIS DOCTOR, B. ARCHITECTURE, B.F.A.
The Stark Building • 1310 East 49th Street • Cleveland, Ohio 44114-3803
Tel.: (216) 426-8400 • Fax: (216) 426-8411 • E-Mail: www.Normstark@aol.com
In Florida • 6500 Midnight Pass Rd. #105 • Sarasota, FL 34242 • (941) 349-2061•
Homepage: www.Jnormanstark.com
Vol. 1, Issue 13 * SPECIAL EDITION * Reissue January, 2009

CONSTRUCTION CONTROVERSIES -BACKCHARGES AND EXTRAS
With greater frequency, claims arising between General Contractors (“GC’s”) and Subcontractors (“Subs”), are based on work actually required of subcontractors, but performed by the GC, and for which the Sub is held liable. For example, the cleanup and removal of packaging materials, crates and pallets, etc., in or upon which certain materials and finished fixtures are delivered to the site, are generally the responsibility of the generating trade, subtrade, or supplier, depending upon the construction contract and agreement of the parties. Where the cleanup is not done, the prime contractor will perform such work or services, and then backcharge the sub by deducting the amount of the backcharge from the sub’s progress payments. Serious disagreements may result, especially where there is inadequate documentation to support the contentions of each party as to such responsibility.
Still other disagreements may arise regarding other areas of subcontractor responsibility or benefit, including: acceleration, delay, use of “float time”, completion of work, “timely performance”, final touch-up of punch listed items, and beneficial occupancy of the tenant or owner.
Project disputes can be avoided by carefully defining all of the terms of agreement, particularly where serious questions of money are involved!
“Extras” are often (humorously) defined as: “…any work, materials, or methods, whether necessary, desired, required, requested, performed or supplied, and not even included!” However, where essential items have been discussed and agreed to by the parties, oral agreements, although (often) sincerely intended, may neither be accurately nor fully recalled later, particularly where serious questions of money are involved. Good business practice recommends a writing, signed by all parties.
Where items are invoiced as “Additional Work” or “Verbal Order”, or “Field Necessity”, the only truly important question is, who pays for it? Clearly, the person or entity authorizing or requiring extra work must pay for it.
Successful construction business practice in the tripartite owner-contractor-subcontractor relation-ship require three important operating principles: (1) All contracts, subcontracts and supply agreements must be negotiated carefully and drafted skillfully to confirm all of the terms of agreement between the parties. (2) The GC’s role as a project coordinator must be that of a skilled, experienced, diplomatic, master-builder-facilitator, not an iron-fisted, militaristic dictator. (3) All of the parties to the construction contract and process must be willing to meet and to resolve all disputes immediately, fairly, and without defamation of any party, or delaying or jeopardizing timely completion of the project.
* * *
AUTHOR: J. NORMAN STARK is an Attorney-at-Law, a Registered Architect, (AIA, NCARB) Registered Landscape Architect, Interior Designer, Planner and Senior Appraiser (ASA), who practices as a Mediator, Arbitrator, and Litigator. He is admitted to practice law before the Bar of Ohio, the US District Courts, Ohio and Illinois (Central Dist.), the US Court of Appeals, and the United States Supreme Court. He has experience in Business, Construction, Public Works, Litigation, Real Estate and Construction-Legal Project and Crisis Management. He also serves as an Expert Witness and provides litigation support. His office is in Cleveland, Ohio.

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  2. Always worth it to follow proper protocol and do things right the first time to avoid such fines.
    -Jon @ construction site cleanup

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