Construction contracts invariably contain statements of fact and directives on accomplishing the work. At what point does an objective assertion become an implied warranty extended from the project owner to the contractor? A federal agency recently received an unpleasant answer.

The Corps of Engineers awarded a contract that designated haul routes to the job site and said the site “shall be accessed only” by those routes. After contract award, local authorities enacted an ordinance that effectively blocked the use of a key route, greatly increasing the contractor’s hauling costs. The contractor claimed this was a breach of an implied warranty. The government said the contractor had agreed to abide by all applicable laws and ordinances. The contractor won the argument.

Other cases this week address the modification of a contractual payment schedule and the question of owner waiver of the right to terminate for late completion. A contractor acquiesced in the modification of the pay schedule to conform to the draw schedule of the owner’s construction loan. And, a project owner did not automatically waive the right to terminate for late completion when the owner allowed the contractor to continue working past the deadline.