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

Earlier this week, I was talking with fellow attorney who does not practice construction law.  At one point in our conversation, he threw out a goocher of a question: "I know this is a hard question, but what do you think causes most of the disputes on a construction project?  I am sure there could be plenty of reasons for lawsuits, but are there some more to blame than others?"

Wow!  That is a hard one ... particularly because there could be so many different reasons for disputes on a construction project.  Here were my top three reaspons for disputes: 

1. Problems with the contract.  The written (or unwritten) contract is what guides the parties' expectations as to payment and performance.  The contract must clearly identify the rights and obligations of each player in the process, from developer, to designer, to contractor, to subcontractor and supplier.  More problems occur because an incomplete, vague or ambiguous "Scope of Work" in the agreement. A well-written contract that properly analyzes and allocates the risk on the project will often save heartache at the time of completion.
2. Problems with the people.  It is no secret that successful companies are driven by successful people.  The opposite is true as well: failing companies suffer from poor management and leadership.  When "people" are responsible for building "things,"  you have to realize that those "people" can cause problems during the construction process, whether you are talking about a loan officer, a design team, a project manager or supply deliveryman.
3. Problems with the unknown.  This is what I would call the "catch-all" category, as disputes often arise from events beyond one or more of the parties' control.  This woud include anything from unusually severe weather, to labor strikes, to differeing site conditions.  These "causes" often involve requests by the contractor for more time and/or money.

If you had to answer my colleague's question, what would you say?

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My children have been mad at Mother Nature over the past month.  One day ... jeans, turtle necks and jackets.  The next day ... shorts and flip-flops.  At least in the South we have not had to deal with 30 inches of snow like on the East Coast.  That kind of weather can cripple a construction project and cause months of delay to the schedule.

As Spring approaches, how do you address the impact of unusually severe weather?  Traditionally, the parties' construction contract will dictate who bears the risk of loss in these types of situations.  Here are some general rules:

• The contractor is usually entitled to additional contract time, but not additional compensation for weather delays.  The AIA contract documents provide that "if adverse weather conditions are the basis for a Claim for additional time, such Claim shall be documented by data substantiating that weather conditions were abnormal for the period of time, could not have been reasonably anticipated and had an adverse effect on the scheduled construction."  The ConsensusDOCs provide that "if the Contractor is delayed at any time in the commencement or progress of the Work by any cause beyond the control of the Contractor, the Contractor shall be entitled to an equitable extension of the Contract Time. Examples of causes beyond the control of the Contractor include, but are not limited to, the following: ... adverse weather conditions not reasonably anticipated ..."
• Delays must be attributable to "unusually severe" weather or weather "not reasonably anticipated."  Of course, by its very nature, such a claim will be factually driven. The contractor should be prepared to establish this by reasonable documentation, such as weather data from the National Oceanic and Atmospheric Administration.
• Weather analysis should be geographically limited.  Having moved from Washington, D.C. to Nashville in 2006, I can appreciate this point.  The entire Middle Tennessee closes down, including the government and schools, at the slightest hint of snow (...exaggerated slightly ...), but it takes 30 inches in D.C. to paralyze the roads and commuters.  The point is that "unusually severe weather" on a Nashville construction site may be different than a site in the nation's capitol.
• The delays must actually impact the schedule.  While you may think that down-time due to weather should automatically entitle the contractor to a time extension, it will depend largely on the contract provision addressing weather delays. You will have to determine whether the inclement weather affected material delivery, access to the site, safety measures, etc.

As with most other issues involving time and money, the parties' contract will determine what happens when Mother Nature refuses to cooperate with your construction schedule.

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