Contractors: To Waive Or Not To Waive Consequential Damages?

A waiver of consequential damages is contained in many construction contracts. The American Institute of Architects, for example, has included a mutual waiver of consequential damages between the owner and contractor since at least 1997 and continues to do so today. (See, e.g., AIA A201-2007, at § 15.1.6). But what does such a waiver mean and is it a good thing for contractors to give up a right to recover consequential damages?

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Good News for Subcontractors and Suppliers: Prospective Lien and Bond Claim Waivers are Null and Void

Until now, Virginia has been among a number of states that allow a subcontractor or supplier of materials to a construction project to waive its rights to a mechanic's lien or a payment bond claim prospectively, before even beginning work, by agreeing to such a waiver in a subcontract, purchase order or even a progress payment lien waiver. With the passage of Senate Bill 891,Virginia joins the ranks of a majority of states that prohibit such waivers.

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Avoiding These Common Contract Administration Issues May Lessen the Likelihood of Claims

In my nearly 30 years of law practice, I tend to see the same mistakes repeated by general contractors and subcontractors during the administration of a project which either cause or contribute to disputes and claims. Three of the most common are (1) failing to give proper and timely notice, (2) proceeding with changed work without proper written authorization or required paperwork in place, and (3) failing to separately account for cost and time associated with extra work, backcharges or claims.

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VA Supreme Court Declares General Contractor Not a Necessary Party to Lien Enforcement Suit

A new decision from the Supreme Court of Virginia involving mechanic's liens may take some by surprise. Practitioners for years have believed that a general contractor is a "necessary party" to a subcontractor's suit to enforce a subcontractor's mechanic's lien. Earlier this month, in a 4-3 decision, the Supreme Court of Virginia ruled that a general contractor was not a necessary party to its subcontractor's lien enforcement suit, where the subcontractor's lien had been bonded and released at the request of the owner of the property and the construction lender.

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Without A Fee-Shifting Provision, Recovery Of Attorney's Fees Is Highly Unlikely In Construction Disputes

In my representation of clients in the construction industry, a question that continually arises (the answer to which often causes frustration) is whether my client can recover its attorney's fees. The answer to that question is generally "no" unless the underlying contract contains what is known as a "fee-shifting" provision.

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