Best Practices Construction Law : Construction Lawyer & Attorney : Matthew DeVries : Stites & Harbison Law Firm : Green Building & LEED Litigation

I was tucking in my Power Ranger last night when he asked me, "Dad, if the clock is unplugged, does time stand still?" I was awed by the brilliant question by this six-year-old mind. "Of course not," I responded. "Okay, Dad. Goodnight." As simple as that, my genius went to sleep.

On a construction project, time is one of the most important variables that must be considered by the parties.  IT DOES NOT STAND STILL.  Here are some things to think about when allocating risk in the parties' agreement relating to time:

• Commencement Date.  Although the parties' agreement may define the Commencement Date, it is better to tie this date to when the contractor receives a Notice of Commencement from the owner.  An often-litigated issue is when the contractor actually begins the work on site and whether there were delays prior to commencement.  Try to clarify when the clock starts ticking for purposes of contract time.
• Liquidated Damages.  In the world of litigation, liquidates damages ("LDs") are a fruitful area of disputes.  The LD provisions in the prime contract are often incorporated into subcontract agreements so that delays caused by subcontractors will be grounds for the prime contractor to assert claims against the responsible subcontractor. As a practical matter, the contractor should make sure any changes by the owner or delays beyond the reasonable control of the contractor allow for a time extension in order to get relief from any assessment of LDs. 
• Scheduling Obligations.  Make sure you identify scheduling obligations, whether you are a prime contractor or subcontractor.  In some instances, you may not have a contractual obligation to maintain a critical path schedule, but you will want to do so nonetheless for claims support.  In other words, you will want to maintain an accurate schedule in order to pursue claims even if you are not contractually required to produce a schedule for the owner.
• Notice Provisions.  Time is also important from the perspective of providing notice of claims.  It is important to identify the notice provisions in the contract and outline them in a separate document.  When all your project members have access to this "notice" document, they can track the dates when notice should be given for particular events (i.e., notice of any delay affecting time of completion or the cost of the work shall be given within seven days of the event giving rise to the claim).  

These are just a few of the important "time " considerations on a construction project.  What tips do you have when discussing time?

Image: katchoo

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Is it too late to discuss a case from 2009?  Nah.  Especially if the court released the opinion within the past two months.  And according to the decision in Shelby County v. Crews (pdf), there are times when it may be too late to withdraw a condemnation petition. That line in the sand appears to be the date after the public entity takes legal possession.

In Shelby County, the Court of Appeals of Tennessee recently held that the County was precluded from backing out of condemnation proceedings too late in the game. The County had possession of a small strip of land owned by the Crews. The County used the land as a parking area for a nearby penal farm and had gone as far as to pave the property. In the summer of 2004, the County filed a Petition for Condemnation of the strip of land pursuant to the condemnation statutes. The County offered approximately $40,000 as to the amount of compensation for the family land owners. The family did not contest the County’s right to acquire the property, but disputed the amount of compensation it should receive for the land. Thereafter, the trial court entered a Consent Order that granted “all property rights and ownership in fee simple” in the property to the County. The trial court scheduled a trial on the issue of compensation for a later date.

One week prior to the scheduled trial date, the County filed a Notice of Non-Suit, which is a document that gives notice of a voluntary dismissal of the condemnation proceedings.  The Crews filed an objection to the non-suit order, arguing that the County was not entitled to dismiss the case because it took possession of the property. The issue before the court was whether the County was entitled to voluntarily dismiss the condemnation after it took possession of the property.

In a short five-page opinion, the court held that the County was precluded from voluntarily dismissing the condemnation proceedings after it had acquired ownership and legal right to possession, leaving only the issue of compensation to be decided.

While this issue may seem like a no-brainer to you, the case is important because it establishes a limitation on a public entity's power to condemn property.  The public entity can no longer take possession of the property and later "back out" of the deal if compensation looks to fall in favor of the private owner.

Photo: Flickr | ToniVC

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