{"id":889263,"date":"2016-06-08T10:43:55","date_gmt":"2016-06-08T16:43:55","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=889263"},"modified":"2016-06-08T10:43:55","modified_gmt":"2016-06-08T16:43:55","slug":"the-contract-isnt-signed-a-few-issues-remain-the-work-is-done-now-what","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/the-contract-isnt-signed-a-few-issues-remain-the-work-is-done-now-what\/","title":{"rendered":"The Contract Isn\u2019t Signed, a Few Issues Remain, the Work is Done; Now What?"},"content":{"rendered":"<p>Stan Martin | <a href=\"http:\/\/www.lexology.com\/library\/detail.aspx?g=18c34021-0193-4419-96dd-73b46e6025e2&amp;utm_source=Lexology+Daily+Newsfeed&amp;utm_medium=HTML+email+-+Body+-+General+section&amp;utm_campaign=Lexology+subscriber+daily+feed&amp;utm_content=Lexology+Daily+Newsfeed+2016-06-02&amp;utm_term=\" target=\"_blank\">Commonsense Construction Law LLC<\/a> | April 25, 2016<\/p>\n<p>Lawyers hate this question. A contractor and subcontractor, having gone back and forth on a <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/innovative-construction-contracting-formats-will-they-succeed\/\" target=\"_blank\">few contract terms<\/a> while the sub is performing work, reach the end of the project \u2013 or at least the end of the sub\u2019s work \u2013 without an agreed contract form. What happens? Lawyers hate the question because clients hate the answer: it depends. There is no \u201cone size fits all\u201d answer to this question. That is the situation recently confronted by the Court of Appeals in North Carolina, and there are a few lessons to be gleaned from the discussion.<\/p>\n<p>The capsule version of events was:<\/p>\n<ul>\n<li>Sub\u2019s July 2011 quote is accepted by the GC.<\/li>\n<li>Subcontract form is proposed by GC in early October, and sub\u2019s comments and revisions are offered in response.<\/li>\n<li>GC reminds sub in late October: no work to start until subcontract is signed.<\/li>\n<li>Sub begins work in early November without signed agreement.<\/li>\n<li>Sub and GC continue to exchange revisions, addenda, clarifications, etc., without reaching agreement, through November, December and January.<\/li>\n<li>Sub\u2019s work is completed in January, and sub asks to be paid.<\/li>\n<li>GC reminds sub: no payment without a signed contract.<\/li>\n<li>Sub sues GC in home court; GC argues venue should be elsewhere.<\/li>\n<\/ul>\n<p>The court notes that this was not a situation where the parties impliedly accepted a contract by failing to respond or by tacitly proceeding. Rather, the sub and GC continued to go back and forth on <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/the-importance-of-construction-contract-coordination\/\" target=\"_blank\">several items in the contract<\/a>, without resolution.<\/p>\n<p>There are many cases in many jurisdictions holding that parties can agree on a contract even if it is not signed. The signature is simply proof of their agreement. But if the contract is not signed, and there are disputes as to the contract terms, the fact-finder must look more closely at what took place. Was there agreement on essential terms? Were the disputed terms material? Did the parties continue to argue? Or did they proceed with performance and ignore \u2013 for the time being \u2013 any disagreement over terms?<\/p>\n<p>As one commentator has noted: &#8220;Failing to memorialize an oral contract does not invalidate the agreement but instead merely affects the mode of proving the terms of the contract.&#8221; Hutson, Jr. and Miskimon, <em>North Carolina Contract Law<\/em>, \u00a7\u00a7 2-4 and \u00a7 2-7-1. The courts also attempt to determine the intent of the parties based on their actions. But in the case at hand, the actions spoke to a continuing, unresolved argument over a handful of clauses, and no one called time out until those issues were resolved.<\/p>\n<p><!--more--><\/p>\n<p>The NC appellate court decision focuses on venue, since the sub filed suit in Forsyth County but the <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/important-contract-clauses-for-subcontractors-and-suppliers\/\" target=\"_blank\">venue clause<\/a> in the unsigned contract called for disputes to be resolved in Wake County. The trial court denied the motion to transfer venue, and the appeals court concurred. The GC had continued to modify the contract as the sub\u2019s work was underway, the sub repeatedly disagreed with certain terms, including venue, a \u201cfinalized subcontract\u201d from the GC had modified terms not acceptable to the sub, and the paper trail demonstrated a continuing disagreement over terms even when the sub\u2019s work was complete. On the narrow issue of venue, the lack of agreement in the subcontract worked against the GC.<\/p>\n<p>The lesson here is the larger picture. Parties who allow the schedule to control performance without resolving the paperwork could find themselves in a mess, particularly if the back-and-forth on contract terms never stops. The sub is unhappy about not being paid, and the GC is unhappy about what it perceives to be a less-than-friendly forum. (Or maybe the GC simply wants the sub to bear the inconvenience of the 100-mile or so trip between counties.) And the court will have to sort out the mess, at a greater cost than either party wants.<\/p>\n<p>The case is <em>Se. Caissons, LLC v. Choate Constr. Co.<\/em>, 2016 N.C. App. LEXIS 432 (April 19, 2016).<\/p>\n","protected":false},"excerpt":{"rendered":"<p>Stan Martin | Commonsense Construction Law LLC | April 25, 2016 Lawyers hate this question. A contractor and subcontractor, having gone back and forth on a few contract terms while the sub is performing work, reach the end of the project \u2013 or at least the end of the sub\u2019s work \u2013 without an agreed&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/the-contract-isnt-signed-a-few-issues-remain-the-work-is-done-now-what\/\">Continue reading <span class=\"screen-reader-text\">The Contract Isn\u2019t Signed, a Few Issues Remain, the Work is Done; Now What?<\/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],"class_list":["post-889263","post","type-post","status-publish","format-standard","hentry","category-construction-contracts","tag-construction-contract","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The Contract Isn\u2019t Signed, a Few Issues Remain, the Work is Done; Now What? - Advise &amp; Consult, Inc.<\/title>\n<meta name=\"description\" content=\"A contractor and sub, negotiating contract terms while the sub is performs work, reach the end of the project without an agreed contract. 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