David Blake

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Issue

The cost and time to perform change order work may increase as a result of COVID-19 impacts that arise after the change order is agreed upon. The Contractor can include contingencies for that risk in its lump sum pricing, but the Owner will have paid an unnecessary premium if those impacts do not materialize.

Proposed Solution

Consider utilizing a COVID-19 Rider with your change orders. The Rider details the types of COVID-19 impacts that entitle the Contractor to relief, as well as the specific relief. This allows the parties to use their standard process and format for change orders, with the COVID-19 issues addressed in the Rider. A one-page Rider is often all you need. The primary issues to address in the Rider are discussed below.
Continue Reading COVID-19 Riders for Construction Change Orders

Thursday, October 7, 2021
1:00 p.m. to 2:00 p.m. Eastern
12:00 p.m. to 1:00 p.m. Central
11:00 a.m. to 12:00 p.m. Mountain
10:00 a.m. to 11:00 a.m. Pacific

Register Here

Real estate developers face numerous pandemic-related challenges. In this webinar, we will discuss how developers are changing the terms of their loan agreements, construction contracts,…

Mounting Evidence of a Sea Change?

On August 16, 2021, the District Court for Clark County, Nevada, denied an insurance company’s motion to dismiss a property owner’s lawsuit seeking business interruption insurance coverage due to COVID-19. A key defense often asserted by insurers in response to such claims is that physical loss or damage is required to trigger coverage and neither results from COVID-19. In this lawsuit, the property owner asserted the impact of SARS-COV-2 virions and COVID-19 exposure on the building’s interior surfaces amounts to an alteration of the property’s conditions resulting in physical damage. Without deciding the issue on its merits, the court found the complaint sufficiently alleged physical damage to trigger insurance coverage and allowed the matter to proceed.
Continue Reading Court Allows Another Lawsuit Seeking Business Interruption Insurance Coverage for COVID-19 to Proceed

Potential Damages

Potential damages arising from the failure to achieve statutory or contractual requirements concerning Leadership in Energy and Environmental Design (LEED) or other green building standards are far ranging and may include: fines, loss of financing or tax incentives, loss of tenants, decreased building value, decreased worker productivity, and increased utility costs.

Direct v. Consequential Damages

Damages are often characterized as direct or consequential. Generally speaking, direct damages are foreseeable and naturally and ordinarily follow the breach, whereas consequential damages are unforeseeable to the breaching party and result from special circumstances. For example, if you were in a car accident, the damage to your car and medical expenses to treat whiplash would be direct damages. If you were on your way to a job interview and lost the job because you missed the interview due to the accident, the lost wages would likely be consequential damages. In our context, a fine arising from the failure to achieve a statutory LEED requirement, such as Silver certification, is probably a direct damage. However, the loss of revenue due to tenants who back out of leases because the building is not LEED certified may be a consequential damage.
Continue Reading Contract Drafting Tip: “LEED” Damages and the Waiver of Consequential Damages Clause

Seyfarth partner David Blake authored “COVID-19 Language for New Construction Contracts,” published by GlobeSt.com on August 24, 2020. In the article, David addresses custom COVID-19 language for new construction contracts. The article is based on two construction contracts for which David successfully drafted and negotiated custom COVID-19 language. One is a private project…

The 2020 edition of The Legal 500 United States recommends Seyfarth Shaw’s Construction group as one of the best in the country. Nationally, our Construction practice earned Top Tier, and our Government Contracts practice earned Tier 3.

Based on feedback from corporate counsel, Seyfarth partner Bennett Greenberg was ranked in the editorial’s “Hall of Fame,”…

Introduction

Those entering into new construction contracts should include custom language addressing the parties’ respective rights and responsibilities related to COVID-19. Many articles and webinars have focused on how traditional contract clauses in existing contracts may respond to COVID-19 issues. The fit is not always clear. Some guesswork is involved and creativity is called upon as square pegs are coaxed into round holes. While there is a need to perform that retrospective analysis to assess how COVID-19 issues will play out under existing contracts, there is no need to propagate uncertainty in new contracts. Indeed, such uncertainty can cause parties to shy away from new contracts or include significant contingencies, neither of which supports an industry trying to recover from the pandemic.

This article addresses custom COVID-19 language for new construction contracts. The principles discussed can be applied to any construction contract. This article is based on two construction contracts for which I successfully drafted and negotiated custom COVID-19 language. One is a private project and the other is a public project. Some of the views expressed during those negotiations are weaved into the discussion to provide both sides’ perspective.
Continue Reading COVID-19 Language for New Construction Contracts: A Practical Approach

On Wednesday, June 3, at 1:00 p.m. Eastern, Seyfarth partners David Blake, James Newland, and Leah Rochwarg are presenting “Construction Challenges During COVID-19: Suspensions, Delays, Workforce Depletion, and Other Considerations,” a 90-minute CLE webinar for Strafford. The webinar will address the impact of COVID-19 on private and federal construction projects and the legal implications that…

The 2019 novel coronavirus and the disease it causes (“COVID-19”) is changing the landscape of construction projects across the country. COVID-19 orders from governors and other public officials are impacting projects by requiring new health initiatives, such as social distancing and the use of personal protective equipment, requiring residents to stay at home and self-quarantine…

This webinar provides a practical review of the impacts of COVID-19 on public and private construction contracts. Coverage includes the clauses covering delay, impact, acceleration, suspension of the work, changes and termination, whether express or constructive. The program focuses on the practical aspects of how best to manage the current situation, notice requirements, documenting claims,…