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What do Construction Lawyers Do? - May 2015

May 07, 2015

In the legal profession, there are lawyers whose practice includes, to a varying degree, the representation of owners, contractors, subcontractors, material suppliers and designers or other parties involved in the construction industry, in matters involving commercial construction project, both private and public, as well as residential construction projects. Attorneys who devote a major portion of their practice to construction and public contract law matters are often referred to as construction lawyers. [1]

Construction lawyers can provide a broad range of legal services to members of the construction industry before, during and after the completion of construction. While a major part of their practices may be the resolution of disputes or claims which have arisen during construction of a project, either by negotiation, mediation, arbitration or litigation, they can and do render other legal advice and assistance to their construction industry clients to help their clients accomplish the goals of successfully completing their work on time and within budget and also to minimize or avoid disputes and other problems arising during the performance of the work.As applied to construction, the terms “contractor” and “contracting” by definition signify one who has entered into, or is entering into, a contract for construction services. The relationship between the parties involved in the construction of any project is defined by the terms of the contract between them. Today, unlike the past when many projects were built based only on a handshake, on almost all large commercial projects and all public projects, whether federal, state or local, the contracts between the parties, and other documents comprising the contract documents, are lengthy and may contain various risk shifting provisions, detailed provisions regarding payment for the work and for changes and extra work, unforeseen and unanticipated jobsite conditions, notice requirements, scheduling and delays, waivers of lien and other rights, liquidated damages, insurance requirements, indemnity, and disputes resolution. Moreover, the contract may incorporate by reference other agreements and documents as well as other provisions required by law or by regulation. Additionally, there are implied obligations imposed on the parties by law which govern their relationships and judge made rules governing the interpretation of various provision of the contract.

Understanding the terms of a contract and the rights and obligations of the parties to contract before it is signed can go a long way towards avoiding disputes later on during construction. And having a proposed contract reviewed by a knowledgeable construction attorney before it is signed may often help avoid disputes arising under or relating to a contract and expensive litigation or arbitration to resolve those disputes.

Where required, the contracting lawyer can also draft recommended changes or additions to a contract, draft or help in the drafting of a contract or subcontract, or participate in the negotiation of the terms of a contract or subcontract.

In the process of bidding on, or responding to an RFP, for a public construction project, the construction lawyer can play a valuable role in reviewing the IFB or the RFP with his or her client and its bid or response to the RFP to make sure that it is responsive and conforms to all of the requirements of the IFB or the RFP. Also, there may be contract interpretation issues in the IFB or the RFP to which the attorney can give his or her opinion, which may bear on the bidders’ or offerors’ decision to include or not include the cost of certain work in its bid or proposal.

When his or her client is unsuccessful in obtaining a contract award for a federal, state or local public project, and there are grounds for a protest, the construction lawyer can help prepare, submit and, if necessary, litigate a bid protest, or defend against a bid protest challenging an award made to his or her client.

Despite the efforts of the parties to avoid disputes during construction, disputes and disagreements will arise. When they do, the construction lawyer may be able to help resolve the dispute or disagreement before it reaches the stage where it is impacting construction, or before the positions of the parties have become hardened and it becomes necessary to invoke the provisions of the contract regarding claims and disputes.

Because the courts in Virginia strictly enforce provisions in a contract regarding notice and imposing deadlines for certain actions, by seeking the advice of the construction lawyer early when an event first occurs which might entitle the contractor to additional compensation or an extension of performance time, he or she can help a party avoid missing a notice or other deadline with a resulting loss of a valuable remedy.

When events do occur on a project making it necessary for a party to submit a claim for added compensation and/or time for changes or additions to the work, for unforeseen and unanticipated subsurface or other jobsite conditions, defects in design or for delays, disruptions and interferences with the work, the construction lawyer can help his or her client prepare the claim and can work with a scheduling or other consultant in the preparation of the claim or a report in support of the claim. He or she can also review the claim to make sure that, in his or her opinion; it conforms to any contract or other legal requirements. And, of course the construction attorney can represent the claimant in any negotiation or dispute resolution procedure invoked with respect to the claim.

There will be times on a construction project when an owner, contractor or subcontractor may find it necessary to consider the termination of a contract with a lower tier party. Because the courts consider the termination of a contract to be a drastic remedy, following the terms of a contract precisely to terminate a contract is essential. Otherwise, a court may find the termination to be a wrongful termination. Before a party decides to terminate a contract with another party, the construction lawyer can review the terms of the contract with his or her client and give his or her advice and opinion as to whether a contract termination can be justified based upon the facts given to him or her and as to the proper procedure which must be followed under the contract to properly terminate it. The construction lawyer can also review and give advice to the party receiving a notice that is contract will be or has been terminated regarding the propriety of the notice and the termination. And should the termination result in litigation or arbitration, the construction attorney can represent the party whose contract has been terminated in any proceeding to challenge the termination, or, if his or her client is the party who has terminated another party’s contract, he or she can defend any proceeding in which a claim of wrongful termination is made.

On federal and other public contracts, an owner or other party may have a contractual right to terminate a contract for the owner’s or other party’s convenience. When such a termination does occur, the construction attorney can assist the terminated contractor in the preparation, submission, and negotiation and, if necessary, the litigation of a termination claim.

There are a myriad of federal, state and local laws which apply to construction. These include, for example, OSHA and other safety regulations, laws and regulations relation to non-discrimination in employment, minority and small business participation requirements, compliance with Davis-Bacon Act wage requirements, environmental laws and regulations, False Claims Act, immigration laws, fire regulations, and prompt payment requirements. Violations of these various laws and regulations can result in the imposition upon a party of severe civil penalties and even criminal penalties in some instances. The construction attorney can offer advice and representation on matters arising out of an alleged violation of a law or regulation occurring during construction.

The right of a contractor, subcontractor or material supplier to be paid for the value of the labor, material, equipment and other costs incurred will be defined by the terms of their contracts and by any laws relating to payment such as the federal and state prompt payment acts. Remedies for non-payment may include, in addition to a civil action to recover the amount due, the right to file a mechanics’ lien or a claim against a payment bond on a public project and some private projects where a payment bond has been required. A party may also have right to stop work or even terminate a contract for non-payment in a proper case. The construction lawyer can provide representation to a party in its efforts to receive payment for money due it for the work it has performed or the material or supplies it has furnished for the construction of a project. Or the construction lawyer can represent a party against whom a claim for payment has been made when the claim is disputed.

When the time comes for the closeout of a project, there may be issues outstanding which must be resolved before final acceptance of the project and final payment can be made.

There may be unresolved claims for changes and extra work, claims for liquidated damages or for delay, unpaid suppliers, etc. The construction attorney can help his or her client resolve any outstanding matters so as to enable the client to finally close its books on the project.

Like the practice of medicine, most construction lawyers practice preventive law in addition to their role as an advocate for their clients. While they are ready to mediate, arbitrate or litigate construction disputes for their clients when necessary, most construction attorneys have acquired a knowledge of construction and the business of their clients in their practice which helps them apply such knowledge to helping their clients avoid the need for costly litigation or arbitration. Like medicine, the time to seek the advice of the construction lawyer should not always be when the “disease” on a construction project has reached the point where the only option to cure it may be expensive and possibly fatal “surgery.” An early diagnosis might have result in a much earlier cure and the avoidance of the cost and inconvenient, time consuming and expensive litigation or arbitration.

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[1] The Construction and Public Contract Law Section of the Virginia State bar has approximately 750 members who regularly practice construction and public contract law.