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O P I N I O N
Final decisions Can project owners be the judge of disputes? Of course they can, especially if the contract clause allows for judicial review.
W e’ve heard children ask parents to explain their decisions, only to get this response: “Because I’m the mom, that’s why!” Mom is the boss and her decision is final on the matter. Children walk away scratching their heads, learning an important lesson in life, sometimes called the “Golden Rule,” as in “He who has the gold makes the rules.” The more brazen child spouts back, “I’m gonna ask Dad!” in an effort to appeal to a higher authority.
William Quatman GENERAL COUNSEL
such as the project architect or engineer, to decide disputes between the owner and contractor, or to “What if the appointed decision- maker has a financial interest in the project, such as the project owner? Can such a person truly be considered ‘neutral?’”
Not far from this scenario is the growing trend for project owners, primarily public owners, to include clauses in their contracts which give them the authority to make final decisions under their own contract! The obvious question is whether a party with a financial interest in the contract can truly be a neutral party and make binding decisions on the other party’s claims. Generally, the courts will not enforce such clauses without a requirement of some level of judicial review or appeal. For decades, we have seen alternative dispute resolution clauses that appoint a neutral person,
See WILLIAM QUATMAN, page 8
THE ZWEIG LETTER October 23, 2017, ISSUE 1221
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