Volume 6 Number 47 | December 1, 2008 - Construction Claims Advisor

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Volume 6 Number 47 | December 1, 2008

EDITOR'S NOTES | Volume 6 - Number 47: Most big-ticket items come with a warranty, which is good to know if you just bought a new big-screen television or laptop at a 4 a.m. Black Friday sale last week. But, would you trust that warranty if it were given by an authorized dealer rather than the manufacturer, for example? That’s essentially what happened in this week’s first case – a regional manager for a stucco system manufacturer promised a five-year warranty to a wary project owner. When the owner went to collect on the warranty for the defective product, the manufacturer rejected the claim, arguing that the manager was not authorized to make such promises. A state supreme court disagreed and upheld the warranty.

This week’s other two cases arise from contractual wordsmithing. In one, the contract specifically limited a developer’s potential claim to the amount paid for the services. The developer was unsuccessful in garnering a bigger claim. In the other case, a subcontractor took the liberty of crossing out a liquidated damages clause of the signed contract it received from the prime contractor. Because the prime did not dispute the edits, it could not assess liquidated damages against the subcontractor at the project’s completion.

TERRITORIAL MANAGER HAD APPARENT AUTHORITY TO WARRANT MATERIALS: A manager’s warranty promise to a contractor stands up in court, despite his employer’s assertions that he lacked authority to make the guarantee.

ARIZONA HIGH COURT ENFORCES LIMITATION OF LIABILITY CLAUSE: A project developer cannot recover more from a surveying service than the amount it paid for that service thanks to a contractual limitation of liability, rules a state high court.

LIQUIDATED DAMAGES CLAUSE STRUCK FROM SUBCONTRACT FORM: A crossed-out paragraph on a signed subcontract is a legitimate contract modification, rules a state appeals court.