August 20, 2007

EDITOR'S NOTES

This week’s first case reads more like a Hollywood marquee than a construction lawsuit. Erin Brockovich Ellis hired Femme Fatale Development to remodel her home in Los Angeles shortly after the success of the movie that bore Brockovich’s name. The developer’s president signed the contract with Brockovich Ellis, who did not know at the time that the business did not have a current contractor’s license. A series of legal scuffles ensued after work began. The main questions in the present case are these: If a contract is declared null, does the attorney fee clause survive? And, can a corporate president be held personally liable for attorney fees if the contract was signed in the president’s corporate capacity? In the instant case, the answer to both questions is yes, says a California appeals court.

Though the players in the second case this week are not as high profile, they face a similar question: Can a subcontractor be held personally liable for a breach of warranty if he signs a contract without proper corporate protections? Again, the answer is yes.

Finally, a municipal agency is faulted for not giving reasonable time extensions to a contractor after issuing numerous change orders.

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