{"id":6793,"date":"2014-08-26T06:09:12","date_gmt":"2014-08-26T12:09:12","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=6793"},"modified":"2014-08-19T14:09:27","modified_gmt":"2014-08-19T20:09:27","slug":"talk-cheap-promises-pay-poor-substitute-adherence-contractual-notice-provisions","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/talk-cheap-promises-pay-poor-substitute-adherence-contractual-notice-provisions\/","title":{"rendered":"Talk is Cheap \u2013 Promises to Pay are a Poor Substitute for Adherence to Contractual Notice Provisions"},"content":{"rendered":"

Charlie G. Baxley – Bradley Arant Boult Cummings LLP – August 1, 2014<\/p>\n

A recent Wyoming case \u2013 JEM Contracting, Inc. v. Morrison \u2013 Maierle, Inc. \u2013 serves as a reminder to contractors and subcontractors of the importance of following the contractual requirements for notice when differing site conditions are discovered. As the contractor in that case learned, failure to comply can serve as a waiver of such claims even when the upstream party makes subsequent promises of compensation for the cost and delays associated with the differing conditions.<\/p>\n

JEM Contracting (\u201cJEM\u201d) entered into contracts with two Wyoming counties to perform construction services to improve 3.6 miles of a road which traveled through both counties. The counties hired Morrison-Maierle, Inc. (\u201cMMI\u201d) to provide engineering services and serve as the owner\u2019s representative on the project. There was no direct contractual relationship between JEM and MMI.<\/p>\n

JEM began work on June 21, 2010. That same day JEM verbally reported to MMI\u2019s on-site representative that it had discovered a differing site condition that would increase time and costs due to the additional work required to pulverize the existing road. JEM\u2019s contract included a provision regarding the procedure for asserting differing conditions claims:<\/p>\n

Contractor shall notify the [counties] and [MMI] in writing about differing subsurface or physical conditions within 5 days of discovery and before disturbing the subsurface as stated above. No claim for an adjustment in the contract price or contract times \u2026 will be valid for differing subsurface or physical conditions if procedures of this paragraph 4.03 are not followed.<\/p>\n

(Emphasis added).<\/p>\n

JEM did not provide written notice of the differing condition until 18 days later, on July 9. The two parties met that same day to discuss the issue. JEM alleged in court that at this meeting MMI told JEM that it would be paid for the increased costs if JEM could find savings on the remainder of the project so that it could complete the work within the contract price. When JEM later submitted its claim formally, however, both MMI and the counties rejected it. JEM brought suit against both shortly thereafter.<\/p>\n

JEM alleged that it had relied on MMI\u2019s statements to its detriment and that it was induced to continue working due to these statements. The trial court rejected JEM\u2019s arguments due to JEM\u2019s inability to show harm from MMI\u2019s representations because JEM\u2019s contract required it to continue performance during a dispute. JEM appealed and eventually the matter arrived before the Wyoming Supreme Court. Wyoming\u2019s highest court initially noted that the lower court had failed to fully consider the types of harms that could have resulted from MMI\u2019s representations \u2013 namely the reduced profit JEM suffering in cutting other areas of work in order to stay within the contract price. Even still, the court said, JEM had clearly failed to assert its claim in writing within the five days required by Paragraph 4.03. The Wyoming Supreme Court found that JEM\u2019s inability to prove that MMI\u2019s representations on July 9 caused JEM any harm was irrelevant, as JEM had already waived its right to such claims when the five day time limit expired.<\/p>\n

Differing conditions are common on projects, as are exchanges like the one that occurred between JEM and MMI on June 21, 2010. JEM likely had good intentions for not following up its verbal notice with a letter, perhaps because it did not want to \u2018rock the boat\u2019 early on in its performance of work. However, as this case showed, once a dispute arises good intentions are a poor substitute for compliance with the requirements of the contract.<\/p>\n

via Talk is cheap \u2013 promises to pay are a poor substitute for adherence to contractual notice provisions – Lexology<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"

Charlie G. Baxley – Bradley Arant Boult Cummings LLP – August 1, 2014 A recent Wyoming case \u2013 JEM Contracting, Inc. v. Morrison \u2013 Maierle, Inc. \u2013 serves as a reminder to contractors and subcontractors of the importance of following the contractual requirements for notice when differing site conditions are discovered. As the contractor in… Continue reading Talk is Cheap \u2013 Promises to Pay are a Poor Substitute for Adherence to Contractual Notice Provisions<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[9],"tags":[224,307,987],"class_list":["post-6793","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","tag-construction-contract","tag-contractual-notice-provision","tag-site-conditions","entry"],"jetpack_publicize_connections":[],"yoast_head":"\nTalk is Cheap \u2013 Promises to Pay are a Poor Substitute for Adherence to Contractual Notice Provisions - Advise & Consult, Inc.<\/title>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/talk-cheap-promises-pay-poor-substitute-adherence-contractual-notice-provisions\/\" \/>\n<meta property=\"og:locale\" content=\"en_US\" \/>\n<meta property=\"og:type\" content=\"article\" \/>\n<meta property=\"og:title\" content=\"Talk is Cheap \u2013 Promises to Pay are a Poor Substitute for Adherence to Contractual Notice Provisions - Advise & Consult, Inc.\" \/>\n<meta property=\"og:description\" content=\"Charlie G. Baxley – Bradley Arant Boult Cummings LLP – August 1, 2014 A recent Wyoming case \u2013 JEM Contracting, Inc. v. Morrison \u2013 Maierle, Inc. \u2013 serves as a reminder to contractors and subcontractors of the importance of following the contractual requirements for notice when differing site conditions are discovered. 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