Protecting Construction Claims

Sep 28, 2016

A reminder of common-sense methods to “preserve construction claims.”

All experienced and successful contractors realize the importance of maintaining records of their business activities.

Conflict resolution is an integral part of construction. Decisions must be made, in part, defensively, taking into account the need to be prepared for the ever-present possibility of litigation.

A short but excellent article in CONSTRUCTION law signal by Christopher D. Carusone and Matthew R. Skaroff, explains why record-keeping provides contractors with added protection should litigation arise.

The authors’ main point is that the manner in which records are preserved is as important as the fact that these records exist. Certain types of records add credibility to a contractor’s case.

“Active and organized record-keeping from the start of the project allows parties to reconstruct problems accurately years later. Standard and objective record-keeping, even when there are no visible problems, support a party’s credibility…”

For example, field notes from daily project logs can demonstrate weather conditions or actions by an owner that may have impacted job costs or project completion dates.

Also, according to the authors, “maintaining these records in the ‘ordinary course of business’ has an added bonus—in court, business records are admissible as evidence and speak for themselves, under a special rule.”

When a contractor files a claim or has one filed against it one of the first questions of fact that arises is whether proper notice of the claim was given in a timely manner. A legitimate claim filed a day late will usually not be entertained by the court.

Contracts should be read carefully before they are signed and again immediately afterwards. Time limits and deadlines should be recorded and earmarked on the project calendar. The appropriate forms and other information required for a filing should also be recorded.

“Payments, change orders, and contract modifications often come with releases.” The authors urge contractors to “specifically exclude” from these releases any potential claims they are aware of.

The simple, but often overlooked steps outlined above, can determine whether a contractor successfully prevails in a dispute.

Source—

The Early Contractor Gets the Worm: The Active Process of Preserving Construction Claims, Christopher D. Carusone and Matthew R. Skaroff, CONSTRUCTION law signal, Sept. 13, 2016.