Volume 6 - Number 25 | June 23, 2008 - Construction Claims Advisor

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You are here: Home » Volume 6 - Number 25 | June 23, 2008

Volume 6 - Number 25 | June 23, 2008

EDITOR'S NOTES | Issue 6-25: Self-employers are often the last people paid on a job. Subcontractors, suppliers, utilities and Uncle Sam must all get their cuts. Stiff the subcontractors and you face the threat of felony theft by contractor, as a two-person construction firm found out. They paid themselves out of the owner’s loan draw on a home remodeling project but failed to pay their subcontractors a proportionate amount. This first case, which appeared before a state supreme court, did not assign guilt to the husband and wife team; rather, it determined that there was probable cause.

In this week’s second case, a court subtly showed that not all parties in claims disputes are held to the same standard. The contractor altered the owner’s plans and specifications in the contract documents. Because one of the owners had a law degree, the court chided her for not paying closer attention to the contract and consequently denied that portion of the owners’ dispute.

Ambiguity is a concept that appears repeatedly in contract disputes. In a recent ASBCA appeal, the board compared contract documents to the project’s plans and specifications to determine that no ambiguity existed.

ON THE MOVE: Find out who got hired and who got promoted in this new column. Want to see your company’s latest news here? E-mail it to editor@wpl.net.

ALLOCATION OF LOAN DRAW RESULTS IN CHARGE OF FELONY THEFT BY CONTRACTOR: A two-person construction firm that pays itself from a loan draw while neglecting to pay its subcontractors can be charged with felony theft by contractor, says a state high court in a denial of an appeal.

CONTRACTUAL DEFINITION OF WORK INCONSISTENT WITH PRIOR DESIGN: A contractor is liable for substandard work but not for deviating from plans and specifications furnished by the owner.