Homework-12
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551
Subject
Law
Date
Jan 9, 2024
Type
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4
Uploaded by GrandYakMaster969
Homework-12
1)
Case Study
1.
How are these facts an example of concurrent delay? What other facts could be
important to allocating responsibility for the delays?
Concurrent delay refers to a situation where multiple factors, originating from different
parties, contribute to project delays. The construction of a shopping mall faced concurrent
delays due to several factors. Fast Grade was delayed due to a shortage of equipment, and
MSC reduced specifications to speed up the project. Late design drawings and value
engineering caused further delays. Communication issues, unforeseen building boom, and
changes in compaction requirements also contributed to project delays. Paving issues, abuse
of construction equipment, and oversyte's direction of paving work resulted in subpar
quality and further delays.
Important factors for assigning responsibility for project delays include communication,
mitigation efforts, contractual agreements, foreseeability, and unforeseen circumstances.
2.
How should the court determine each party’s responsibility if more than one party is
responsible?
When multiple parties are involved in a case, the court must carry out a thorough assessment
of contractual agreements, causation factors, and individual contributions to project delays.
The court should review the predictability of delays, adherence to industry standards, and
efforts made by each party to mitigate them. It is essential to scrutinize the contractual
provisions that specify the responsibility for delays, including any concurrent delay clauses.
The ultimate goal of the court is to achieve a fair resolution that accurately reflects each
party's role in the delays and their resulting impact.
3.
Which party or parties should be responsible for the cost incurred for MSC’s delay in
completing the parking lot?
The cost of the parking lot delay can be shared by MSC, Oversyte, and Fast Grade, Inc.
4.
Is it significant that Oversyte, rather than the owner, directed Perfect Surface to install
more paving?
yes
5.
Did the actions of Eager or Perfect Surface indicate acceptance of Fast Grade’s work?
What facts could affect your decision on this question?
Actions by Eager and Perfect Surface, including pressuring for quick paving and making
repairs, suggest acceptance of Fast Grade's work. The influence of MSC and Eager's
pressure to expedite the process is a key factor influencing this decision.
6.
How could the parties have avoided the dispute over the paving of the parking lot?
Sai Prasanna Reddy Samreddy
20016902
12/9/23
Clear communication, detailed contracts, realistic scheduling, and collaborative problem-
solving could have prevented the dispute over the parking lot paving. To ensure a smoother
project execution, it was crucial to identify issues at an early stage, provide regular updates,
adhere to specifications, and have a comprehensive risk mitigation plan in place.
7.
Is the architect, Precise, responsible for the delay and delay costs?
No, Precise is not responsible for the delay and delay costs.
8.
Does the written agreement issued by the architect, Precise, to allocate responsibility
for the paving repairs have any effect on the parties’ original obligations or
performance failures?
The Precise agreement on paving repairs significantly alters the parties original obligations
by outlining specific responsibilities and a timeframe for maintenance and repairs. It
provides a structured framework for addressing performance failures related to the paving
issues.
2)
Research and Answer the following questions:
a.
What is a “Price Escalation” Clause
i.
Under what circumstances can the Price Escalation Clause be invoked by
1.
Owner and
2.
General Contractor
ii.
Provide/Submit a copy of a Price Escalation Clause
A "Price Escalation" clause in construction agreements allows for adjustments to the
contract price under specific circumstances, typically due to changes in the cost of labor,
materials or other factors affecting construction expenses due to economic variables.
i.1) Owner: The owner can use it when costs rise due to unexpected factors beyond their
control. Triggered by significant changes in economic conditions or circumstances.
i.2) General Contractor: The contractor can make use of the Price Escalation Clause when
there are proven increases in labor, materials, or other factors impacting construction costs.
The clause is put into effect after the contractor can prove that the conditions leading to cost
escalation have occurred.
ii) Price Escalation: The contract price is subject to adjustment in the event of significant changes in
the cost of labor, materials, or other factors affecting construction expenses.
b.
What is a “Force Majeure” Clause
i.Under what circumstances can the Force Majeure Clause be invoked by
1. Owner and
2. General Contractor
ii.Provide/Submit a copy of a Force Majeure Clause
A "Force Majeure" clause is a provision in a contract that allows for the delay or exemption of
contractual duties in the event of unforeseen and extraordinary circumstances beyond the control of
the parties involved. These circumstances, which are often referred to as “acts of God" or "acts of
nature,” may include natural disasters, war, terrorism, strikes, and other events that prevent or make
it impractical for the parties to fulfill their contractual obligations.
i.1) Owner: If circumstances beyond the owner's control hinder or delay the project's advancement,
they can invoke the Force Majeure Clause. These circumstances may include occurrences such as
natural disasters, war, or actions taken by the government that render it impossible or impractical to
proceed with the construction.
i.2) General contractor: The contractor in charge has the right to make use of the Force Majeure
Clause if their capacity to fulfill contractual responsibilities is hindered by external occurrences.
Such occurrences may include extreme weather conditions, strikes, or supply chain disruptions that
are beyond the contractor's control.
ii) Force Majeure: Neither party shall be considered in breach of this contract for any failure or
delay in performance arising out of events beyond the control of the party, including, but not limited
to, acts of God, war, terrorism, government actions, natural disasters, or other unforeseen
circumstances.
CASE BRIEF
639 P.2d 192
Supreme Court of Utah.
E. Arthur HIGGINS, Plaintiff and Respondent, v.
CITY OF FILLMORE, Defendant and Appellant. No. 17018.
Dec. 28, 1981.
Facts:
•
In 1971, E. Arthur Higgins was hired by the City of Fillmore to install a sewer system.
•
The contract completion deadline was set at 180 days from the notice to proceed. The contract
also specified that any delays would incur liquidated damages. However, certain types of delays
were considered excusable, such as those that were caused by specific orders from the engineer,
the owner's failure to provide the right of way, the owner's neglect, or unforeseeable events
beyond the contractor’s control.
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•
The project faced multiple obstacles that impeded its advancement. These challenges consisted of
the freeway and access ramp's construction over the planned sewage line, the City's failure to
secure the essential rights-of-way, and the relocation of the lagoons after work had already
commenced at each previous site.
•
The counterclaim made by the City stated that they were entitled to liquidated damages due to the
project exceeding the specified contract time. However, the court ultimately sided with Higgins
and granted him a sum of $78,120.08 as compensation.
•
The city filed an appeal against the findings of the trial court as well as the amount of damages
awarded.
Issues:
•
Is it the City's responsibility to pay for liquidated damages resulting from the project's inability to
finish within the specified 180 days?
•
Is there evidence to support the awarded damages for increased labor costs from July 1, 1972, to
the project's completion date in June 1973?
•
Is the claim for compensation regarding the higher cost of using gravel to backfill trenches that
cross the state road justified?
Ruling:
1. Evidence of the City's delays and inability to anticipate the impact of the new freeway supported
the reasonableness and justification of the completion date.
2. Due to the City's delays, there were increased labor expenses, and the court upheld the damages
awarded for this.
3. Under the law of damages, the court found it appropriate to award damages for the loss of
efficiency during an unanticipated second winter.
4. The court confirmed the damages for the increased cost of gravel, stating that it was incurred in
compliance with the contract. The City's insufficient inspection resulted in the use of gravel.
Explanation:
• The court ruled that the City's delays, lack of foresight regarding the freeway's impact, and
inability to obtain essential permits justified the lower court's decision regarding the completion
date. The City's actions were a factor in the delays.
• The City's delays caused increased labor expenses, which were upheld in court. Evidence
supported contractor's additional costs.
•
In accordance with the law of damages, the court decided to provide compensation for the loss of
efficiency that occurred due to an unexpected second winter. The City's shortcomings caused
delays which negatively affected the working conditions, thus justifying the contractor's claim for
compensation for the loss of efficiency.
• The court has ruled that the contractor has the right to receive payment for the higher cost of
using gravel instead of the expected material, which was a result of the City's inadequate
inspection. The contractor's request for extra expenses was approved by the court because it was
in accordance with the contract.
• Higgins was granted a total of $78,120.08 by the court, which emphasized the City's
accountability for the delays and extra expenses that occurred due to its actions and decisions.