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Real Estate Journal — Fall Preview — September 25 - October 15, 2015 — 3C
M id A tlantic
By John Sylvanus, Barley Snyder Construction and design contracts C onstruction L aw
R eal estate transactions frequently involve construction or reno-
discovered and reduced to litigation within two years of substantial completion of construction. If the contractor skimped on the foundation and two and a half years after completion the building com- pletely collapsed, you cannot sue. If the wiring was so bad that two and a half years after completion the building burned to the ground, you can- not sue. Other clauses waiving in- demnity, limiting damages and creating conflicting com- munications channels lurk in the fifty-two pages of the most
current version of the AIA 201 General Conditions of the Con- tract for Construction, prob- ably the most commonly used form for this purpose. Fortu- nately the design contract is only forty pages. These form Agreements and thousands of other pages of similar forms have a long history of inter- pretation by courts, resulting in conflicting questions and meanings far fromwhat a non- professional might anticipate. Experience and expertise is necessary in the risk analysis of contracts for design and con- struction. That process should
be a standard procedure. The cost of such a review is minis- cule in comparison to the value of the contracted work and the potential loss or cost of resolv- ing disputes. What kind of dispute resolu- tion provisions are contained; what happens if a contractor claims another contractor caused delay; what are the liquidated damages and how is communication during con- struction handled? These are but a few of the matters that should be understood before entering into an agreement relating to construction, but
frequently are accepted with- out question. Failure to know what is contained in your con- tract, andmore importantly, to understand its meaning can be financially devastating. John Sylvanus is an at- torney with Barley Snyder in its Litigation and Con- struction Law Groups . He is an experienced litigator who counsels clients in construc- tion related matters, with experience in litigation in both state and federal courts, arbi- tration and mediation and ap- pellate litigation. jsylvanus@ barley.com | (717) 852-4988. n
vation proj- ects. Famil- iarity with construction laws, practic- es and con- tracts can be an important part of your business. If
John Sylvanus
you have ever been involved in a construction dispute, you know the cost and frustra- tions, even if you are success- ful. If you have never had this experience, you should consider yourself fortunate. What would you do if you were presented with a stan- dard AIA construction agree- ment that included the lan- guage below? Would you or your real estate advisors know what it means and how it could affect you? As to acts of failures to act occurring prior to the relevant date of Substan- tial Completion, any appli- cable statute of limitations shall commence to run and any alleged cause of action shall be deemed to have ac- crued in any and all events not later than such date of Substantial Completion. This language means trou- ble. If you signed a construc- tion contract with this lan- guage in it, you have waived the “discovery rule” and lost the right to make a claim for hidden defects in construc- tion unless those claims were a section of the MARE Journal P.O. Box 26, Accord, MA 02018 781-871-5298 • 800-584-1062 fax 781-871-5299 www.marejournal.com Publisher/CEO Linda Christman lchristman@marejournal.com Section Publishers Alissa Aronson araonson@marejournal.com Fall Preview
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Barbara Holyoke bholyoke@marejournal.com Section Editor Julie King editor@marejournal.com
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