Column and Beam

A blog for design and construction professionals.

Category: Contracts (page 1 of 5)

Show Me The Money! – Why Design Professionals Are Often Lawsuit Targets.

Why are design professionals attractive targets in litigation relating to construction projects?  The answer is easy – they have good insurance coverage.  To understand why, you need to know the differences between the Commercial General Liability (CGL) policies purchased by contractors and subcontractors and professional liability coverage purchased by most design professionals.

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Why Design Professionals Should Disclaim Implied Warranties

South Carolina is one of a handful of states that recognizes an implied warranty that applies to design services.  In South Carolina, certain warranties are implied into every design contract that is governed by South Carolina law.  The South Carolina Supreme Court recognizes an implied warranty of “fitness of plans and specifications” where a design professional provides plans and specifications for use on a construction project.  Of even greater concern, in Tommy L. Griffin Plumbing & Heating Co. v. Jordan, Jones & Goulding, Inc., the South Carolina Supreme Court potentially expanded this implied warranty when it found that an engineer who performed both design and construction administration services potentially warranted not only the design but also the “quality of construction.” 

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What You Need to Know About Waivers of Subrogation

A waiver of subrogation is an effective risk management tool.   Before you sign a contract containing such a clause, you need to know what a waiver of subrogation means and who needs to agree to the waiver to make it effective.  Subrogation is “the principle under which an insurer that has paid a loss under an insurance policy is entitled to all the rights and remedies belonging to the insured against a third party with respect to any loss covered by the policy.”  This means that an insurer who pays a claim has the right to “step into the shoes” of another party to bring a claim for damages. 

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Pay Attention! Payment Provisions Really Matter if You Want to Be Paid.

We are often asked to help clients by reviewing specific sections of contracts that they have been asked to sign.  Invariably, the sections that clients most often ask us to review involve warranties, indemnity and insurance.  Rarely, do our clients ask us to review the payment sections of a contract.  When we raise questions about the payment sections, we often learn that our clients are not really looking at those sections themselves, except to see if the amounts that they proposed are included.  Few design or construction professionals really study proposed contracts and consider the payment provisions – until they have not been paid, and then they want to know what remedies they have.

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If You Are Not Properly Licensed, You May Not Get Paid

In South Carolina, a contractor must be properly licensed to file a lawsuit or mechanic’s lien to collect money owed.  It is well-known that a general or mechanical contractor’s license is required for commercial construction with a total cost over $5,000.  However, proper licensure does not simply mean having a Group One general contractor’s license.  Proper licensure varies according to the specific project, but it may require holding a license for certain subclassifications (such as concrete, masonry, roofing) or holding an appropriate group license for larger projects.  The consequences of not holding the proper license are dire, since it may prevent a contractor from recovering any damages.

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