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Breach of AIA Construction Contract and Waiver of Consequential Damages By Owner

Our client, a general contractor, and the project owner signed an American Institute of Architect A101 contract with accompanying A201 general conditions. The project included construction of a new office/retail building, and associated site work and parking facilities in Amherst, New Hampshire. The project site included an existing building and several underground septic structures and piping that needed to be demolished a removed before construction could begin in earnest on the new building. Prior to signing the contract, the owner removed this demolition work from our client' scope of work and reduced the contract price accordingly. The owner's effort to save money on the demolition work, however, did not go as planned. The owner's demolition contractor did not diligently pursue its work and the project languished. Instead of starting work on the new building on June 1st or client could not commence work until late July. Despite this set back our client delivered the completed project in a shorter overall timeframe than originally planned though later than the original completion deadline that was premised on the June 1 start date. The owner, nonetheless, sought to hold our client responsible for the delays and withhold funds due to purported loss of rental income.

Our client filed suit in New Hampshire Superior Court and placed a mechanic's lien on the project. As required by the contract, the parties then proceeded to arbitration under the American Arbitration Association Rules. In arbitration we asserted that the owner's claim was factually unsupportable and at odds with the mutual waiver of consequential damages clause in the AIA A201 terms and conditions. The arbitrator agreed and awarded our client the full contract balance and interest.

Firm Highlights

Matter

Procurement

We have assisted many owners, and contractors in design and construction contracting including: Massachusetts Institute of Technology Investment Management Company on over a billion dollars in projects in Kendall Square area of Cambridge, Massachusetts...

Matter

Recovery From Surety and Professional Liability Carrier for Defective Turbine and Biomass Energy Facility Components

Our client developed a biomass fired cogeneration power facility to sell power back to the grid and to support its sawmill operations. As part of this project, it entered into a $13+ million contract...

Publication/Podcast

New Rules for Apprentices on Energy Projects Come with Uncertainty for Contractors and Developers

On January 1, 2021, a new law went into effect setting benchmarks for use of apprentices on energy generation facility construction projects. Enacted in 2019, the law was part of “An Act to Establish...

News

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77 Verrill Attorneys Recognized by Best Lawyers® 2023, Including Six Named Lawyers of the Year

Matter

Subcontractor Prevails on Wrongful Termination and Delay Claims Following 18 Day Arbitration

Our client was terminated as a mechanical subcontractor on a U.S. Navy project at the Portsmouth Naval Shipyard in Kittery, Maine for alleged delays. Our client and its surety faced claims for costs of...

Matter

Representative Litigation Matters

Represented one of the nation's largest geotechnical subcontractors in claims against a major general contractor arising from construction of pier improvements at an East Coast naval facility Led defense trial team in a four-week...

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