- Educate Yourself About the Project. If you are working with an owner that is new to you or if you are a subcontractor working with a general contractor with whom you have not worked previously, ask others about their reputation. Before venturing into a relationship, investigate the project’s financing and the reputation of those holding the purse strings.
- Condition Your Bid. Condition your bid on fair contract terms. This need not be limited to boilerplate exclusions and clarifications. Instead use the bid process as an opportunity to set the stage for contract negotiating.
- Read Your Contract Before Signing It. Even if the contract appears to be a standard AIA or Consensus Doc, read it. Scrutinize it. Make sure you understand it and make efforts to negotiate those terms that ask you to take on unbalanced risk.
- This Means Read All of the Contract Documents. Read all exhibits as closely – if not more closely – than the contract itself. Exhibits can include lien waiver forms, broad indemnity agreements and change order forms that release various rights otherwise set forth in the contract. If you are a subcontractor, ask for and review the prime contract as most subcontracts incorporate the prime contract, plans, specifications and all addenda thereto.
- Be on the Lookout for Risk-Shifting Clauses. As part of your risk management practice, develop a list of contract provisions that have caused you problems on past projects. Examples include: pay-if-paid vs. pay-when-paid clauses, overbroad indemnity clauses that ask you to indemnify against the indemnitee’s own negligence or to indemnify direct rather than third-party claims, no damages for delay clauses where the delay was caused by the owner, etc.
Angela Otto joined Ball Janik LLP as a partner in the construction and litigation practices. Her focus is representing clients on construction and design, construction defect, and litigation matters. Ms. Otto represents general contractors, subcontractors, suppliers, owners, developers and design professionals in construction disputes, litigation, arbitration and mediation. She also represents clients on significant delay and impact claims, complex disputes, and other matters pertaining to the design and construction of multi-million dollar facilities.
A client recently asked me to confirm when a joint venture must be licensed to bid and perform construction work. I explained that the answer depends on the name of the joint venture, where the work will be performed, and – depending on the state in which work is to be performed – the stage of construction.
Both Washington and Oregon generally require contractors to be registered or licensed to perform construction work in their respective states. RCW 18.27.020 requires every contractor to be registered with Washington’s Department of Labor and Industries to advertise, offer, bid, or perform any construction services in Washington. Similarly, ORS 701.021 requires every contractor to be licensed with Oregon’s Construction Contractor’s Board to offer, bid, or perform any construction services in Oregon.
In Washington, RCW 18.27.065 further provides:…
The Oregon Court of Appeals recently issued a decision confirming the pre-lien notice requirements necessary to perfect a lien in Oregon. The case, known as Multi/Tech Engineering Services, Inc. v. Innovative Design & Construction, LLC, 274 Or App 389 (2015), discussed whether a lien recorded by Multi/Tech for engineering services could be foreclosed where Multi/Tech may have failed to provide the project owner a notice of right to lien.
The case involved the development and construction of a commercial project in Salem owned by Adler Commercial Properties (ACP). The project owner retained the services of Innovative and Gene Pfeifer to assist in the development of the project, who in turn hired Multi/Tech to provide various engineering services. Following Innovative’s and Pfeifer’s failure to pay Multi/Tech’s final invoice, Multi/Tech recorded a lien identifying ACP (and other related entities) as the project owners and Innovative and Pfeifer as the lien debtors. Thereafter, the trial court granted a judgment of lien foreclosure to Multi/Tech. ACP, among others, appealed asserting that Multi/Tech failed to properly perfect its lien.
The Court of Appeals confirmed that under ORS 87.010(5) professionals providing engineering services, such as Multi/Tech, were generally authorized to lien the project for which such services were supplied. The Court went on further, however, to emphasize that “[i]n order to perfect one of the construction liens authorized by ORS 87.010, including a lien under ORS 87.010(5), a person who is entitled to a lien ordinarily must provide the owner of the property subject to the lien with notice of the person’s right to a lien.” Citing ORS 87.021(3)(a), the Court cautioned that “[f]ailure to provide the notice – when notice is required – means that the lien is not perfected and is not valid.”…