March 24, 2008

EDITOR'S NOTES

If you want to know about local conditions, the best people to ask are the locals. “Just ask the locals” isn’t just a marketing campaign by New York City Mayor Michael Bloomberg to generate a more positive tourism trade in the Big Apple. The concept plays into business dealings as well. The Armed Services Board of Contract Appeals denied a differing site conditions claim because it said the contractor didn’t do its homework. It should have talked with and listened to local contractors about local conditions for a dredging project.

Congenial relationships in business can create a pleasant working environment. A handshake can be as good as a signed contract. However, when those relationships sour, at least one party will reach for the signed contract and demand that the original agreement be upheld. It’s the classic environment for a claims dispute as shown in a conflict between a contractor and residential developer.

Can a contractor get away with adding a $9.5 million line item adjustment to a $1.7 million public works contract? Not according to the New Jersey Superior Court, Appellate Division. Because the bid was unbalanced and the contractor did not follow adjustment protocol, it could only recover the actual cost of the work, which was $52,330.

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