Archive: August 2010

1
“Agreements to Agree” May Not be Enforceable
2
Green Building is Big Business and Carries Potentially Big, But Manageable, Liability Risks
3
K&L Gates Partner Gregory Andre Co-Authors Chapter about Negotiating Construction Contracts
4
Failure to Provide all Necessary Minority and Woman-Owned Business Enterprise Subcontracts Within Reasonable Time After Subcontract Award is Material Breach of Contact
5
The Availability in the UAE of Liens to Secure Payment under Construction Contracts

“Agreements to Agree” May Not be Enforceable

By: Todd Reuter, K&L Gates, Spokane/Coeur D’Alene

Spokane Structures, Inc. v. Equitable Inv., LLC, 148 Idaho 616, 226 P.3d 1263 (2010)

"Agreements to agree" may not be enforceable.  Here, a contractor signed a one-page document entitled “Design/Build Agreement” that provided that the contractor would “design, engineer, and draft plans in preparation of all documents/drawings required to enable the owner and contractor to agree on a final design and cost of construction to be performed.”  The contractor presented a final design plan to the landowner, but the landowner decided not to follow through with the project.  The contractor sued for specific performance, trying to force the owner to pay him for work.

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Green Building is Big Business and Carries Potentially Big, But Manageable, Liability Risks

By:  Josh M. Leavitt, K&L Gates, Chicago

Introduction

While there are those who debate whether green building is effective from an environmental impact point of view, no one seriously debates that it is big business.  One researcher reports green expenditures were approximately $10 billion in 2005 and between $36 billion and $49 billion in 2008.  Hupp, Recent Trend in Green Buildings Laws: Potential Preemption of Green Building and Whether Retrofitting Existing Buildings Will Reduce Greenhouse Gases and Save the Economy, The Urban Lawyer Vol. 41, No. 3 (Summer 2009).  Paul Primavera, Senior Vice President of the Lockton Companies predicts that “within the next three to five years certified green buildings will account for 25 percent of all new construction in the United States.  Green Buildings: New Construction Concepts and Risks, (Fall 2009) available at http://www.lockton.com/Insights-And-Publications/White-Papers

Certainly political forces and public awareness are at work, but there is no doubt that the green building explosion has been driven by the belief that it is profitable.  The work product of researchers and consultants projecting benefits from green building improvements, the sales representations of green building product manufacturers and public and private incentive programs have fed those expectations.  Project owners expect to receive specific and often quantifiable benefits from their investments, including energy savings, reduced overhead and maintenance, more tenant interest, increased lease income, and government incentives (such as tax credits, low-interest loans, density bonuses, zoning waivers, fast-track permitting, and reduced permit fees), and other financial incentives.  They also expect less quantifiable benefits such as energized work forces, general goodwill, and marketing benefits.

To read more, click here.
 

K&L Gates Partner Gregory Andre Co-Authors Chapter about Negotiating Construction Contracts

Chicago Partner Gregory Andre, with the help of Associate Michael Roth, made a significant contribution to a recently published resource on construction law by co-authoring a lengthy chapter about negotiating construction contracts.  The chapter, aptly entitled “Negotiating Construction Contracts”, provides a detailed discussion of the topic and addresses a myriad of underlying issues, including information to be provided by the owner and the contractor, changes in the work and change orders, delay, claims disputes, default, and many others.

Available from the Illinois Institute of Continuing Legal Education, the 2010 edition of Construction Law: Transactional Considerations can be purchased by clicking here.
 

Failure to Provide all Necessary Minority and Woman-Owned Business Enterprise Subcontracts Within Reasonable Time After Subcontract Award is Material Breach of Contact

Jay Dee/Mole Joint Venture v. Mayor and City Council of Baltimore, 725 F. Supp. 2d 513 (D. Md. 2010)

In an interesting decision issued by the United States District Court for the District of Maryland, the Court held that a prime contractor was in material breach of its contact with the City of Baltimore for not entering into promised subcontracts with Minority and Women-Owned Disadvantaged Businesses.

Under Maryland law, state and local public contracts typically require participation by minority, social, economic and woman-owned disadvantaged businesses (collectively “DBs”).  Such participation is usually accomplished by subcontracts, which are typically entered into post prime contract award.  To qualify as a bidder/offeror, however, the prime contractor must make certain certifications and representations as to how the DB participation requirements are to be met.

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The Availability in the UAE of Liens to Secure Payment under Construction Contracts

By Neal R. Brendel, Amy L. Barrette, & Wadih El-Riachi, K&L Gates, Dubai

This article was originally published in Arab Law Quarterly.

Abstract
While much attention has been devoted to curbing the rise of lawsuits surrounding Dubai’s struggling construction industry, surprisingly little attention has been focused on another option available to contractors who seek payment for failed or troubled projects.  Contractors, architects, and engineers may find relief under a seldom-reported UAE federal law that establishes qualified rights for contractors to secure payment for work under non-governmental contracts by filing a priority lien against the project itself.  This article discusses the remedy, know in many common-law jurisdictions as ‘mechanic’s liens’ or ‘builder’s liens’, and why it is important for contractors to be familiar with the applicable Civil Code and Civil Procedure Code provisions.  Those who first exercise their lien rights and seek to register liens with the Land Department will be treading new ground and will want to be well-prepared and educated on their rights provided under existing law.

To read the full article, click here.

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