Volume 7 - Number 16 | April 20, 2009
Recent Issues
EDITOR'S NOTES | Issue 7-16
Etymologically speaking, a loophole is a slim architectural opening in a solid wall (a window was formerly called a loop). Used for military purposes, this small hole in a bastion or fort could be used to aim a musket or arrow at the enemy without great fear of incoming artillery. Today, a loophole is so much more than a hole in a wall. Loopholes or escapes are intentionally inserted into laws, regulations and court decisions to create exceptions to rules. Such was the situation in a case in California where the court opined that a construction manager on a private project does not necessarily need a state contractors’ license to perform managerial work. The decision leaves the door wide open for unscrupulous practices by unlicensed contractors, wrote a dissenting judge.
Tax law is another place where loopholes abound. But, there were no tax loopholes for a contractor that performed federal work on tribal lands. The contractor began the three-year, fixed-price project with the understanding it was responsible for a business tax to the tribal nation for contract receipts. The tribe increased the tax rate midway through the project, however, and the contractor’s appeal for a price adjustment based on a defective specification failed.
Finally, a state high court created a loophole for design professionals who are sued for economic losses due to negligence. Unless the negligence results in personal injury or property damage, the designer may be protected.
CONSTRUCTION MANAGER ON PRIVATE CALIFORNIA PROJECT NOT COVERED BY LICENSING STATUTE
A California court creates a licensing loophole for construction managers on privately funded projects.
GOVERNMENT DID NOT MISREPRESENT TRIBAL TAX
A tribal business tax increase midway through a fixed-price irrigation project cuts into the contractor’s expected profit. The contract leaves the contractor unprotected from the unforeseen loss.
NEVADA ADOPTS 'ECONOMIC LOSS' RULE FOR DESIGN PROFESSIONALS
The Nevada Supreme Court decides that design professionals are protected against negligence suits for economic losses if the dispute does not involve personal injury or property damage.
