Contract Drafting and Negotiation

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

On August 26, 2020, James Newland, AIA, partner in Seyfarth’s Construction group, along with Andrew McCoy, Ph.D., Professor and Associate Director of the Myers-Lawson School of Construction at Virginia Tech, will present the a free Lunch and Learn program: Construction Risk Management, Changes, Delays, Inefficiency, and Claims.

The program is free of charge and

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

Force Majeure, Commercial Impracticability, and Frustration of Purpose

The outbreak of COVID-19 has been one of the most disruptive events to the global economy in recent memory. Businesses across every sector of the economy are scrambling to determine the legal repercussions of government travel restrictions, labor shortages, supply chain interruptions, financing impacts, and market price

For projects that involve excavation or foundation work, even the most diligent pre-bid site survey may not fully inform the contractor of what conditions to expect below the surface. The risks of encountering unforeseen subsurface conditions are so high that, rather than encouraging bidders to include large contingencies in their proposals, construction lawyers have drafted a special clause—the Differing Site Conditions clause. The purpose of the Differing Site Conditions clause is to allocate the risk for conflicting, inaccurate, or incomplete pre-bid information furnished by the project owner. While the Differing Site Conditions Clause should, in theory, be a pile driver’s closest ally, recent cases interpreting this clause highlight some of the challenges to prosecuting claims under this provision.
Continue Reading What Lies Beneath (And Who Pays for It?): Common Issues Arising Under the Differing Site Conditions Clause

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

Owners and contractors trying to understand the full impact of COVID-19 on their projects are likely turning to delay[1] or force majeure provisions in their construction contracts to assess their rights or liabilities for continued performance. An event of force majeure is a circumstance that prevents someone from fulfilling a contract, and many articles recently have been written addressing the contours of typical force majeure clauses.
Continue Reading Temporary Impracticality or Frustration of Construction Contracts During the COVID-19 Pandemic

With the exponential spread of COVID-19, owners, contractors, and design professionals are recognizing the substantial impact this pandemic will have on the construction industry. Several states issued shelter-in-place orders, resulting in the suspension of some construction work.[1] In some states, this has resulted in work stoppages on some of our nation’s largest infrastructure projects. The financial impact of these work stoppages will be significant. As a result, parties to construction agreements have looked to their force majeure clauses for guidance on how these issues should be addressed.
Continue Reading Coronavirus Pandemic: My Construction Agreement Has a Force Majeure Clause, So Now What?

Globally, many developers and contractors are scrambling to identify available contractual relief as the Coronavirus (COVID-19) disrupts cross-border supply chains. US businesses will recall a similar effort just eighteen months ago, when the Trump Administration announced increased tariffs on $300 billion of Chinese goods. That trade war prompted  companies to scrutinize remedies and mitigate associated project risks by tapping alternative sources originating in other Asian countries and Canada. Once again, construction industry stakeholders should reexamine delay provisions in pending and future contracts to mitigate risks arising from project disruptions caused by COVID-19.

This article provides an overview of US case law interpreting the doctrine of force majeure in the context of disease-related delay claims. Drawing on that guidance, we then identify practical considerations for applying existing force majeure or related delay provisions and how they may be modified for future projects.
Continue Reading Managing Project Risk Associated with the Coronavirus Outbreak Through Force Majeure Provisions

On February 22, 2020, Leah Rochwarg and Wendy Wendrowski will participate as panelists in a program at the American Society of Civil Engineer’s Construction Institute Summit regarding a design professional’s obligation to indemnify its client (to compensate its client for losses sustained because of the design professional’s acts or omissions). While many design contracts include