Wampler.us

The importance of a construction business owner establishing a relationship with an attorney

Chris Wampler — Sat, 15 Oct 2011 23:34:26 +0000

I have had situations where clients obviously did work and were obviously owed money; however, they neglected to register their company in the state where they needed to bring their case. As a result, they lost their cases. These cases provide an example of one of the snares among many in the minefield of legal technicalities out there. Avoiding being entrapped by a law, rule or regulation that could seriously harm your business requires legal guidance. Requirements mandating registration and licensing of a business are just the tip of the technicality iceberg. The risk these technicalities create impacts every aspect of your business from the language of your contract to your method of interaction with customers to the appearance of your jobsite.

It is very important for any construction business owner to establish a relationship with an attorney so that the business owner can call upon the attorney for advice whenever a voyage into uncharted business territory. I have been practicing law since 1987 and I want to give you the benefit of my experience so that you can avoid the pitfalls that are out there. The first half an hour is on me (I don’t charge you for it). Please give me a call and set up a consultation.

Even if you have never talked to me in a preliminary introductory setting, please talk to me if you are running into problems on a job.

The importance of a well drafted Construction contract

Chris Wampler — Sat, 15 Oct 2011 23:33:30 +0000

Many of my first time construction business owner clients assume that they will be able to get their attorney’s fees paid back by a customer if the business owner has to sue the customer for nonpayment of an invoice; however, if the business owner uses a contract that was not prepared by an attorney (even AIA contracts in many cases) they are most always surprised to find out that they cannot get these fees back. Even worse, because they cannot get these fees back, they lose their biggest source of leverage to facilitate quick resolution and payment by the customer

There is simply no excuse not to have contracts prepared and reviewed by an attorney. The inability of a contract to authorize recovery of collection expenses is just one of many shortcomings of contracts prepared by laymen, computer software or your local office products store. Often contracts run afoul of statutes or regulations and can result in fines or worse sanctions for the business owner. Sometimes contract terms are vague or contradictory and thus unenforceable.

I try very hard to arm my clients with a good contract and to make their legal fees affordable. Often, I prepare simple contracts for a low flat fee.

Paid when paid/ Paid if paid/ Flow through contract clauses

Chris Wampler — Sat, 15 Oct 2011 23:08:05 +0000

They are the lifeblood of general contractors and despised by subcontractors. Flow through agreements provide for payment of a subcontractor when or if a general contractor is paid. Contractors will tell you they need flow through clauses in their contracts, for among other reasons, to insure that their subs do work which satisfies the owner. Subs will tell you that flow through clauses provide contractors with excuses not to pay them when a job is underbid or is improperly managed by the general contractor.

However, flow through clauses are often interpreted only as a timing mechanism for requiring payment and often cannot be used as a method to completely deny payment to a sub if proper work is performed. The language of the flow through clause and the state where the work is performed are very significant when determining if a flow through clause is enforceable.

When drafting, negotiating or deciding whether to sign a general/ subcontractor agreement, it is important that a contractor seek the assistance of counsel in order to determine the effect of the ever present flow through clause.

Subcontractor not Responsible for injuries caused by OSHA/ MOSHA violation after leaving job

Chris Wampler — Fri, 14 Oct 2011 15:51:19 +0000

In the recent case of C & M Builders, LLC v. Strub the Maryland Court of Appeals held that a framing subcontractor was not responsible for injuries caused by OSHA/MOSHA violations when it had left the job for three weeks and had surrendered control of the jobsite to allow work to be performed by other subcontractors.

In C & M Builders the framing subcontractor cut holes in the floors of a three story building to prepare for installation of staircases by another subcontractor. An HVAC subcontractor was called in to do work in the intervening period. An employee of the HVAC subcontractor fell to his death through one of the holes. The court determined that even if the framing subcontractor had violated OSHA and MOSHA regulations it was not responsible for injuries because it owed no duty to protect the HVAC subcontractor employee because retained no control or oversight at the worksite, had completely finished its responsibilities under its contract and relinquished control of the premises back to the general contractor.