Volume 8 - Number 17 | April 26, 2010
Recent Issues
EDITOR'S NOTES | Issue 8-17
Construction contracts commonly call for the contractor to provide the project owner or owner's representative with written notice of particular occurrences: delay, changed work, unforeseen site conditions, anything that can give rise to a claim for relief. The question then becomes, does the contractor's failure to provide timely written notice truly deprive the contractor of a remedy under the contract?
Generally, if the owner has actual knowledge of the occurrence and is not deprived of any options, the owner cannot use the lack of written notice against the contractor. Differing site conditions, however, can be a sensitive matter. Once a physical condition has been disturbed or work has continued, the owner's ability to respond to the situation may be compromised. Notice requirements are more strictly enforced in this context.
This was illustrated in a recent Kansas case. The contractor failed to provide timely written notice of ground water conditions, but contended the project owner was well aware of the situation from the outset. The court had to decide whether to enforce strict adherence to the written notice requirement or to adopt the more lenient approach used in federal construction contracting. The court elected strict enforcement.
Other cases this week addressed arbitration and a roofing bond. A material supplier was forced to submit its payment claim to arbitration even though the supplier never signed a contract or otherwise expressly agreed to arbitration. And, a roofing bond never went into effect because the project architect never certified final completion.
SITE CONDITION CLAIM DEFEATED BY STRICT WRITTEN NOTICE REQUIREMENT
A contract requirement for prompt written notice of a differing site condition was strictly enforced against a contractor. Kansas law does not recognize the more lenient approach applied in federal construction contracting.
SUPPLIER FORCED TO ARBITRATE PAYMENT CLAIM DESPITE LACK OF WRITTEN AGREEMENT
Even though a material supplier had no written agreement with a subcontractor, the supplier was compelled to submit its payment claim to arbitration, consistent with the terms of the written agreement between the subcontractor and prime contractor.
ROOFING BOND NOT ACTIVATED WITHOUT CERTIFICATE OF FINAL COMPLETION
A roof warranty and a bond guaranteeing that warranty commenced upon the project architect’s execution of a certificate of final completion. The architect never signed the certificate and the construction contract was eventually terminated for default. The roof bond never went into effect.
