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Smith, Currie and Hancock's Common Sense Construction Law. A Practical Guide for the Construction Professional. 5th Edition

  • ID: 2899027
  • Book
  • February 2015
  • 896 Pages
  • John Wiley and Sons Ltd
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Knowledge of construction law is essential to running a successful construction business. This Fifth Edition of the bestselling Smith, Currie & Hancock's Common Sense Construction Law provides a practical introduction to the significant legal topics and questions affecting construction industry professionals. This Fifth Edition translates the sometimes confusing theories, principles, and established rules that regulate the business into clear, layperson's English.

This edition updates the comprehensive scope of its predecessor with new material that:

- Addresses evolving risks in with design–build projects with requirements for consideration of long–term ownership and operation expense in contractor's proposals
- Examines the emerging Public Private Partnerships (P3) model for constructing large scale projects
- Details the increasing complexities involved with international construction projects
- Covers the newest industry–standard contract documents produced by the AIA, ConsensusDocs, DBIA and the EJCDC on Companion Web site wiley.com/go/constructionlaw5e

Providing an up–to–date and thorough guide to a sometimes intimidating but critical aspect of the practice of construction, Smith, Currie & Hancock's Common Sense Construction Law, Fifth Edition gives industry professionals the practical knowledge they need to avoid legal surprises, gain a competitive advantage and orient project personnel. For a better understanding of construction law by anyone engaged in construction, Smith, Currie & Hancock's Common Sense Construction Law is an efficient reference.

SMITH, CURRIE & HANCOCK LLP was founded in 1965. With offices in Atlanta, Georgia; Charlotte and Raleigh, North Carolina; Fort Lauderdale, Florida; Los Angeles and San Francisco, California; and Washington, D.C., the firm has nationally recognized practices in the areas of construction law, government contracts, and environmental law. The firm represents clients in all fifty states, as well as Puerto Rico, Mexico, Canada, South America, Europe, Africa, and Asia.

Companion Web site: [external URL]
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Preface xxvii

Author Biographies xxix

1 The Legal Context of Construction 1

I. Introduction 1

II. Contract Law 1

III. Evolution of Construction Law 4

IV. Torts 5

V. Statutory and Regulatory Laws Affecting the Business of Construction 8

2 Interpreting the Contract 12

I. The Importance of Contract Interpretation 12

II. What Is a Contract ? 12

III. The Goal of Contract Interpretation 13

IV. Defining Contract Terms 14

V. Interpreting the Contract s Wording 15

VI. The Facts and Circumstances Surrounding Contract Formation 17

VII. Resolving Ambiguities 20

VIII. Implied Contractual Obligations 21

IX. Contractual Obligations Arising by Operation of Law 26

3 Alternative Contracting Methods 28

I. Traditional Approach to Construction: Advantages and Disadvantages 29

II. Multiprime Contracting and Fast–Tracking 30

III. Construction Management 32

IV. Design–Build Contracting: What Works to Avoid Disputes 36

V. Design–Build Aspects of Traditional Construction 46

VI. Contractor Liability Issues 50

VII. Engineer–Procure–Construct 52

VIII. Building Information Modeling 56

4 Public–Private Partnerships 61

I. The P3 Alternative 63

II. P3 Project Participants 71

III. P3 Financing Strategies 76

IV. P3 Risk Allocation 82

V. Conclusion 85

5 International Construction Contracts 87

I. Unique Issues 87

II. Project Delivery Methods and Contract Forms 89

III. Dispute Resolution 102

6 Working in a New State: Pre–proposal and Performance Considerations 108

I. Qualifying to Do Business 108

II. State Registration Requirements: Bonds to Secure Payment of Taxes 110

III. State Licensing and Qualifications 110

IV. State and Local Laws Governing Construction 112

V. Public–Sector Construction (State, Local, and Federally Funded State and Local Projects) 114

VI. State Statutes and Policies Affecting Contractual Relationships and Terms 117

VII. Preservation of LienBond Rights 123

VIII. Project Risk Assessment Foreign States 126

IX. Information Sources 127

Appendix 6.1 Checklist: Projects in Foreign States 129

7 Competing for the Contract 133

I. Introduction: Transition from Sealed Bids to Negotiated Best–Value Awards 133

II. Key Concepts in Traditional Public Competitive Bids Responsiveness and Responsibility 134

III. The Lowest and Best Bidder 140

IV. Negotiated Best Value Selection Process 143

V. Electronic Bids 145

VI. Reverse Auctions 147

VII. General Considerations When Competing on Private Contracts 148

VIII. Effect of Past Performance Evaluations on Award Process 149

IX. Contractor Bid Mistakes 157

X. Bid Protests on State or Local Government Contracts 162

XI. Bid Bonds 165

XII. Bid Shopping : What Is the Obligation of the Prime Contractor to the Subcontractor Submitting the Lowest Price? 167

XIII. Holding Subcontractors and Vendors to Their Bids 170

XIV. Statute of Frauds Issues 173

XV. Damages 174

8 The Uniform Commercial Code and the Construction Industry 177

I. Applicability to Construction Projects Purchasing Equipment and Materials 177

II. Determining When Article 2 Applies 178

III. Modifying U.C.C. Obligations 179

IV. Contract Formation under the U.C.C. 179

V. Risk of Loss 183

VI. Inspection, Acceptance, Rejection, and Revocation of Acceptance 184

VII. Warranties under the U.C.C. 188

VIII. Statute of Limitations and Commencement of the Warranty Period 190

IX. Performance Issues 192

9 Authority and Responsibility of the Design Professional 199

I. Overview 199

II. Standard of Care, Professional Responsibility, and Liability 200

III. Authority of the Design Professional 208

IV. Administrative Functions of the Design Professional 211

V. Other Duties of the Design Professional 224

VI. The Design Professional s Liability to the Contractor and Third Parties 225

VII. Statutes of Repose 232

VIII. Effects of Contractual Limitations on Design Professional Liability 234

IX. Assumption of Design Liability by the Contractor 238

X. Shared Responsibility and Risk 241

XI. The Design Professional s Copyright for Design Documents 243

10 Subcontract Administration and Dispute Avoidance 248

I. Dispute Avoidance Begins at the Bidding Stage 248

II. Preparation of the Subcontract Agreement 254

III. Should Subcontractors Be Bonded? 277

IV. Dispute Avoidance by Diligent Project Administration 278

11 Contract Changes 291

I. What Is a Changes Clause? 291

II. Recovery under the Changes Clause 297

III. Who Is Authorized to Order Changes? 300

IV. Written Documentation of Changes 303

V. Constructive Changes 308

VI. Cardinal Changes 314

VII. The Impact of Numerous Changes on Unchanged Work 316

VIII. Impossibility Impracticability 317

12 Differing Site Conditions 320

I. Differing Site Condition Defined 320

II. Responsibility for Differing Site Conditions 320

III. Standard Industry Differing Site Conditions Clauses 321

IV. Comparison of DSC Provisions 330

V. Operation of the Differing Site Conditions Clause 332

VI. Stumbling Blocks to Recovery 343

VII. Relief in the Absence of a Contract Provision 351

Appendices Site Investigation Checklists 356

I. General Notes 356

Appendix 12.1 Project Checklist: Qualifying the Site 357

Exhibit A: Site Investigation Record 358

Appendix 12.2 Pre–Bid Environmental Considerations 360

13 Schedules, Delays, and Acceleration 362

I. Allocating the Risk of Performance Time in the Contract 363

II. Use of Schedules in Project Management 369

III. Analysis of Project Delay 372

IV. Typical Causes of Compensable Delay 375

V. Concurrent Delay 382

VI. Excusable but Noncompensable Delays 383

VII. Acceleration 385

VIII. Contractual Limitations to Recovery for Delays 388

IX. Owner Claims for Delay 391

X. Delay Claims and the Use of CPM Schedules 392

XI. Documentation to Support Delay Claims 394

14 Inspection, Acceptance, Warranties, and Commissioning 399

I. Inspection 400

II. Acceptance 413

III. Contractual Warranties 420

IV. Project Commissioning and Post–Acceptance Facility Operations 425

15 Management Techniques to Limit Risks and Avoid Disputes 431

I. Construction: A Risk–Prone Business 431

II. Qualifying the Project and the Participants 432

III. Defining Rights, Responsibilities, and Risks: Parties and Their Contracts 439

IV. Contract Framework 441

V. Avoiding and Preparing for Disputes through Proper Management and Documentation 445

VI. Prudent and Responsible Estimating 446

VII. Establish Standard Operating Procedures 447

VIII. Establish Lines of Communication 447

IX. Project Documentation 448

X. Electronic Communications on Construction Projects 455

XI. Cost Accounting Records 459

XII. Monitoring the Work through Scheduling 460

XIII. Preserving Electronically Stored Information 461

XIV. Conclusion 462

Appendix 15.1 Consensus Docs 221 Contractor s Statement of Qualifications for a Specific Project 465

Appendix 15.2 Logs and Forms 475

Appendix 15.2A Format for Notice Checklist 476

Appendix 15.2B Sample Partial Notice Checklists 478

Appendix 15.2C Forms 482

Appendix 15.2D Request for Information 487

Appendix 15.2E Telephone Conversation Memorandum 488

Appendix 15.2F Sample Daily Report 489

Appendix 15.2G Notice of Backcharge 490

Appendix 15.2H Field Order Status Chart 491

Appendix 15.2I Log: Incoming Correspondence 492

Appendix 15.2J Log: Outgoing Correspondence 493

16 Payment Bonds 494

I. Payment Bonds Required by Statute 495

II. Payment Bonds on Private Projects 501

III. Who Is Protected by Payment Bonds 501

IV. Work Qualifying for Payment Bond Coverage 507

V. Recovery under Payment Bonds for Extra Work, Delay Damages, or Lost Profits, and Other Costs 510

VI. Distinguishing between Payment Bond Claims and Performance Bond Claims 513

VII. Procedural Requirements 513

VIII. Effect of Payment Bonds on Lien Rights 517

IX. The Surety s Defenses to Payment Bond Liability 518

17 Performance Bonds and Terminations 522

I. Surety Performance Bonds 522

II. Termination 540

18 Proving Costs and Damages 558

I. Basic Damage Principles 558

II. Methods of Pricing Claims 565

III. Contractor Damages 568

IV. Owner Damages 584

19 An Overview of Environmental and Safety Concerns on the Construction Site 593

I. Sources of Environmental Regulation and Liability 593

II. Minimizing Environmental Risks Prior to Contracting 603

III. Management Techniques for Environmental Risks during Contract Performance 609

IV. Mold: Developing a Program to Limit Liability 611

V. Environmentally Friendly Construction: Green Buildings 613

VI. Construction Safety 617

20 Construction Insurance 627

I. Importance of Insurance Planning 627

II. Introduction to the Language of Insurance Policies 628

III. Types of Insurance 630

IV. Contract Requirements for Insurance 637

V. Prompt Action to Protect Potential Coverage 640

VI. Insurer s Response to Claims 641

VII. Routine Coverage Issues 643

VIII. Concurrent Causes 650

IX. Construction Insurance and Mold Claims 651

21 Labor and Employment Issues Affecting the Construction Industry 658

I. Immigration Issues 658

II. Employee Safety and Health 664

III. Wage and Hour Requirements 665

IV. Employee Benefits: ERISA 676

V. Employment Discrimination 677

VI. Family and Medical Leave Act 687

VII. Union Activity 689

VIII. Utilizing Employee Background Investigations 693

IX. Workers Compensation Exclusive Remedy Assertions 695

22 Bankruptcy in the Construction Setting 698

I. Introduction 698

II. The Players 698

III. Key Terms 699

IV. Bankruptcy Code 701

V. Status of the Debtor s Contracts 710

VI. Status of Materials and Equipment 715

VII. Status of Contract Funds 718

VIII. Other Sources of Funds 723

23 Resolution of Construction Disputes 730

I. Early Claim Recognition and Preparation 731

II. Early Involvement of Experts and Attorneys 732

III. Demonstrative Evidence 734

IV. Contemporaneous Records 735

V. Components of a Well–Prepared Claim Document 736

VI. Calculating and Proving Damages 738

VII. Pursuing Negotiation and Settlement 739

VIII. Arbitration 743

IX. Litigation 755

24 Federal Government Construction Contracting An Overview 764

I. Introduction: The Key Differences 764

II. Contractor Selection 770

III. Social–Economic Policies 778

IV. Resolution of Contract Disputes 800

V. Standards of Conduct for Contractors 811

Appendix A Basic Internet Resources and References Federal Government Construction Contracts 818

I. System for Award Management (SAM) 818

II. Fed Biz Opps 818

III. Information on Regulations and Agencies 818

Reference Materials 819

Index 821

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Thomas J. Kelleher Jr.
John M. Mastin
Ronald G. Robey
Smith, Currie & Hancock LLP
Note: Product cover images may vary from those shown