Using price adjustment clauses to reduce risk
Article Abstract:
A contractor must carefully analyze contract provisions to reduce contract performance risks. Otherwise, the firm cannot make charges for additional contract costs due to price increases and changes in trade conditions. The Army Corps of Engineers Board of Contract recently denied Southern Dredging Company Inc's claim for additional contract costs. Southern claimed that the Gulf War raised fuel prices and construction costs and this unexpected development made the project impracticable. However, the board cited the law which holds a contractor responsible for potential risks in the absence of contract price adjustment clauses.
Publication Name: Civil Engineering
Subject: Science and technology
ISSN: 0885-7024
Year: 1992
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The enforceability of "pay when paid" clauses
Article Abstract:
The state and federal courts have upheld the 'pay when paid' clause to force subcontractors to share the financial risks of a project with their general contractors. The case study of Galloway Corp. versus S.B. Ballard Construction Co., involving a $10,960,000 contract between a general contractor and the owner, reveals the risk of non-payment or slow payment by the owner to the contractor. The contractor can postpone payments to his subcontractors until he receives payment from the owner.
Publication Name: Civil Engineering
Subject: Science and technology
ISSN: 0885-7024
Year: 1996
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A/E liability and design/build
Article Abstract:
Conflicts may arise between the general contractors and A/E's on design/build projects. The A/E is a prime design builder, co-venturer or sub-contractor in a design/build relationship. The C.L. Maddox Inc. V. Benham Group, Inc. case demonstrates the importance of having teaming agreements in writing. The involved parties should be responsible towards each other. A limitation in the liability clause exists in the contract between the A/E and the general contractor.
Publication Name: Civil Engineering
Subject: Science and technology
ISSN: 0885-7024
Year: 1997
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