arbitration – Construction Law Musings- Richmond, VA

Construction Contract Basics: No Damages for Delay

After WAY too long a hiatus, I am back with another in my series of “Construction Contract Basics” posts. In past posts, I’ve covered venue provisions, attorney fee provisions, and indemnity clauses. In this post, I’ll share a few thoughts (or “musings”) on the topic of so-called “no damages for delay” clauses. These clauses essentially state that a subcontractor’s only remedy for a delay caused by any factor beyond its control (including the fault of the general contractor), after proper notice to the owner or general contractor, is an extension of time to complete the work. Continue reading Construction Contract Basics: No Damages for Delay

Happy Holidays from Construction Law Musings

Merry Christmas from Construction Law Musings We are nearing the end of another year and looking forward to the next. For a shorter or longer time, all of the family is home for some Christmas cheer while Musings takes some holiday R&R.

I wish you all Happy Holidays and Merry Christmas from The Law Office of Christopher G. Hill, PC, and Construction Law Musings. To all of my friends, colleagues, and most importantly, family, I hope you have a safe, warm, and wonderful holiday.

Thank you for your continued support and I look forward to a great 2024 with you, my readers.

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Construction Contract Basics: Attorney Fee Provisions

I have discussed the need for attorney fee provisions in your construction contracts in prior posts here at Construction Law Musings, but thought it merited a restatement of the reasons for the inclusion of such fee provisions (and changing of such provisions when presented) here with the second of my construction contract basics posts.

Why would you want such a provision? The answer is that without it, or a statute specifically allowing for such fees, a Virginia court will not award your attorney fees without such a provision. Virginia, and a lot of other states, follow the so-called “American Rule” when it comes to attorney fees and costs. In short, that rule states that the parties to litigation pay their own way unless they agree otherwise. While it may seem unfair to make a successful litigant pay for the privilege of being right, that is the rule in Virginia. Throw in the fact that Virginia courts strictly construe construction contracts and voila we have a situation where without a provision in the contract stating that one party or both will be able to collect attorney fees should that contractor or subcontractor prevail, a construction professional that gets sued (whether rightly or wrongly) will be left with a hefty attorney fees bill and no way to recoup those fees through the courts or any other method. Continue reading Construction Contract Basics: Attorney Fee Provisions

E-Mail Can Waive Arbitration (sometimes)- A Cautionary Tale

Originally posted 2010-12-11 10:00:10.

We have discussed arbitration clauses at length here at Musings. From the judicious use of these clauses to help resolve disputes to waiver of rights under these clauses through inaction, arbitration clauses permeate the construction landscape. A recent case out of the Western District of Virginia Federal Court adds a new wrinkle to this analysis. In Protherapy Associates LLC v. AFS of Bastian, Inc et al, the Court considered an arbitration clause in a service agreement.

In this case, the Plaintiff provided therapy services to residents of nursing homes. It sued for breach of a contract that included a standard arbitration clause stating that all disputes relating to the contract are to be resolved through arbitration. Subsequently, the parties reached a settlement agreement through e-mail negotiation. The agreement, again in e-mail form, stated the amounts to be paid to the plaintiff by the defendants and on what schedule. The settlement e-mail also stated that any dispute relating to the non-solicitation provisions of the contract would be resolved in the Western District of Virginia Federal Court. However, this final e-mail did not provide for any particular jurisdictional requirements for payment disputes and explicitly left any unchanged portions of the original contract in full force.

The defendants brought a motion to compel arbitration under the original contract. The Court denied this motion relating to the non-solicitation claims and granted it as to the payment dispute. The Court reasoned that the parties specifically waived arbitration as to the non-solicitation provisions but specifically left arbitration in force regarding all other contractual claims.

While this case is not one relating to a construction contract, it provides some good lessons for construction professionals and the construction lawyers who advise them.

1. E-mails resulting in changes to a contract, even through settlement negotiations, can waive contractual provisions.

2. Choose your words in such e-mails carefully, you may end up in two different venues like the defendants in this case if you are not careful to either keep arbitration in force for all claims or for none.

3. The power in point 1 of this list, when used carefully, can assure that the parties to a contract end up in the venue that they desire when seeking to enforce a negotiated settlement.

In short, be careful when crafting a non-judicial settlement of a contractual dispute to avoid litigation over what the settlement means. It is expensive enough to litigate any breach of terms of a settlement without having a court tell you what those provisions entail.

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Is Arbitration Okay Under the Miller Act? It Is if You Don’t Object

Originally posted 2014-10-13 09:15:01.

Map of the United States District Courts in Virginia (Photo credit: Wikipedia)

I have discussed both payment bond claims under the Miller Act and alternate dispute resolution (ADR) here at Construction Law Musings on many an occasion. A question that is sometimes open is what to do when there is contractually mandated arbitration for claims “relating to the contract or the work.”

While here in Virginia, as in most places, the courts will almost automatically send any breach of contract case with such a clause to arbitration, a question exists whether the claim against the bond held by a surety that is not a party to the contract is subject to being referred. Well, in a recent opinion the District Court for the Eastern District of Virginia in Norfolk weighed in on this question where there was no opposition or objection to a motion to stay pending arbitration.

Continue reading Is Arbitration Okay Under the Miller Act? It Is if You Don’t Object