Published: July 26, 2018

The United States Court of Appeals for the Fifth Circuit recently held that federal contract law does not require active investigation by a subcontractor to demonstrate justifiable reliance relating to a fraudulent inducement claim asserted against a general contractor.  See Fisk Elec. Co. v. DQSI, L.L.C., No. 17-30091, 2018 WL 3188304, at *1 (5th Cir. June 29, 2018).

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Published: July 20, 2018

In a recent decision, the appellate division of the New Jersey Superior Court rejected a competing bidder’s challenge that the winning bid was deficient, finding that the bid’s deficiencies were immaterial and therefore waivable.  H&S Constr. and Mech., Inc. v. Westfield Pub. Sch., No. A-3696-17T4, 2018 WL 3282287, at *1 (N.J. Super. Ct. App. Div. July 5, 2018).

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Published: July 13, 2018

Illinois is the most recent in a number of states to consider legislation that modifies the practice of withholding payments from contractors and subcontractors as retainage.  The practice of retainage has been regulated by the vast majority of states for public projects, private projects or both.  In its last session, the Illinois legislature passed SB 3052, which restricts retainage. Now it is up to Governor Bruce Rauner to decide if Illinois should join those states restricting retainage on construction projects.  

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Published: June 27, 2018

A California Corporation, Swinerton Builders, Inc. ("Swinerton"), entered into a Master Services Agreement (MSA) with a West Virginia company, March-Westin Company, Inc. ("March-Westin"), for March-Westin to provide timber products.  Swinerton subsequently issued a work order to March-Westin under the MSA for a project in Colorado and, following a disagreement on schedule and price, rescinded the work order.  March-Westin filed a complaint against Swinerton in the U.S.

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Published: June 20, 2018

Until last week, Contractors in Massachusetts only could succeed on a breach of contract claim if the contractor proved complete and strict performance of all contractual terms.  Furthermore, a contractor only could recover on a quantum meruit under an equitable argument if the contractor proved good faith performance of work.

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Published: June 1, 2018

Construction owners often require their contractors to name the owner as an additional insured on the contractor’s insurance policy.  But what happens when the owner requires the contractor to name the owner’s construction manager as an additional insured as well?  A recent decision from the Court of Appeals of New York held that the contractor’s insurance policy did not provide additional insured coverage for the owner’s construction manager.  See Gilbane Bldg. Co./TDX Constr. Corp. v. St. Paul Fire & Marine Ins. Co., 31 N.Y.3d 131 (2018).

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Published: May 24, 2018

At the tail-end of the 2018 legislative session, the Maryland General Assembly passed Senate Bill 853, making construction general contractors jointly and severally liable for the failure of their subcontractors to pay their employees in compliance with Maryland's wage and hour laws.  This new law will become effective October 1, 2018. California recently passed a similar measure, AB 1701, which is applicable to construction contracts entered into in that state on or after January 1, 2018.

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Published: May 18, 2018

Termination for convenience clauses are common in construction contracts with governmental entities and provide the government with disproportionate power over whether a contractor will be able to fully perform its contract.  Certain Federal procurement contracts require termination for convenience language that permit the governmental agency to terminate a contract when it is "in the Government's interest." For Federal contracts, a termination for convenience generally is proper if the governmental agency does not terminate in bad faith or if the agency does not abuse its discretion.

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Published: May 8, 2018

Contractors and other service providers often receive negative or unfavorable reviews on internet sites. While some negative reviews are justified, others are not. What can a contractor do to get relief from a negative review? One critical consideration is whether the review states "opinions" or "facts."

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Published: May 3, 2018

The abstention doctrine allows a federal district court to stay or dismiss a case properly before it for reasons of "wise judicial administration."  The US District Court for the District of Rhode Island recently applied this doctrine, and elected to abstain from ruling on a Petition to Confirm an arbitration award, in a dispute involving the construction of three boats.  See Wendella Sightseeing Co. v. Blount Boats, Inc., No. CV 17-368 WES, 2018 WL 1620925 (D.R.I. Mar. 30, 2018).

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