Construction Law

Construction Law Newsletters

Acceptance of Work and Waiver of Defects

When the owner “accepts” the contractor’s work, he generally waives any claims he may have with respect to the contractor’s performance. In the construction industry, “acceptance” by the owner is not confined to the owner’s express approval of the work that is in accordance with the construction contract provisions. He can also expressly accept work that contravenes the terms or conditions of the contract.

Conditional Use Permits

Conditional use permits are special exceptions to existing zoning laws and, as the name suggests, such permits are dependent on the occurrence of certain “conditions” being met. These permits allow the municipality a modicum of discretion in balancing the suitability of a parcel of land for a designated purpose with the public’s health, welfare, and safety.

“Substantial Completion” of Construction Contract

Once a construction contract has been substantially completed, the owner is liable to the contractor for the final payment on the contract price. The contractor must prove “substantial completion.” Thereafter, the burden shifts to the owner to prove otherwise or show defects in the contractor’s work that impacts the project’s completion.

TERMINATION OF FEDERAL CONSTRUCTION CONTRACTS BASED ON DEFAULT

Construction contracts with the federal government must generally be completed by the scheduled completion date because the government has an interest in its occupancy or use of a project. The government normally secures the completion of the project by the scheduled completion date through performance bonds, penalties for delay, or escrow accounts.

Third-Party Claims Against Retainage Funds

Retainage funds do not only serve as a protective mechanism for an owner on a construction project. Third parties may also benefit from the funds that have been earned by the contractor, but withheld pending completion of the construction project. Third parties may seek to satisfy a contractor’s outstanding indebtedness out of the retainage funds.