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Volume 4 - Number 01 | January 2, 2006

EDITOR'S NOTES
We start off this new year with several valuable lessons for contractors.
1. If you file a complaint, make sure it will stand up in court. A complaint didn’t bode so well for a California contractor hired to build a restaurant.
2. If you include a subcontractor’s bid in your bid to an owner, make sure the subcontractor is contractually obligated to honor that bid. One contractor was left footing the bill for excess costs when the subcontractor backed out because of a miscalculated bid.
3. If you don’t like the terms of a contract, address them at the beginning of the project. Don’t wait until delay costs start piling up to dispute the reasonableness of the fees.
Our final case is a review of an insurance issue we see time and time again; namely, what constitutes an “occurrence” and what role does a subcontractor play in determining that occurrence.


LICENSURE IN CALIFORNIA: THE PROOF IS IN THE PLEADINGS
By James J. Ison
Despite the plaintiff’s petition to amend its complaint, a California appellate court upholds the trial court’s dismissal, maintaining that the contractor lacked proper licensing required by state licensing laws.

SUBCONTRACTOR NOT BOUND TO ITS MISTAKEN BID PRICE, BUT PRIOR COURSE OF DEALING COULD ESTABLISH BREACH OF CONTRACT
By Kevin J. McKeon
A contractor is left with excessive costs after a subcontractor backed out of the contract because of an inaccurate bid. However, the court rules that the contractor may seek redress in the future for breach of contract.

CONTRACTOR LOSES CASE TO REDUCE LIQUIDATED DELAY DAMAGES
The terms of liquidated delay costs should be negotiated at the beginning of a contract, not after the contractor fails to meet contract deadlines.

SUB’S DEFECTIVE WORK QUALIFIES AS “OCCURRENCE” IN CONTRACTOR’S CGL POLICY
By Scott C. Turner
A CGL insurer must honor a claim from its policyholder for defective shower installation work caused by a subcontractor.