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socrateaser, Lawyer
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I wanted to give you more information:a construction contract

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I wanted to give you more information:

a construction contract states: "Both builder and owner will make best efforts to amicably resolve any disagreements. Upon written notice, eac will be give 2 wqeeks to provide a plan to resolve any issues that might arise. An additional 2 weeks will be given to agree upon a plan. Both must agree on the plan going forward to ensur contractual agreements and plan specifications are carried out."

then we (builder and owner) can not come to agreement on a plan. Owner terminates the builder because we can not agree on next step with an architect to review work that owner alleges is faulty. after cannot agree, owner sends builder termination letter that states, "than your for taking time to meet to discuss possibel resolution, because of your clients failure to gree to meet at the job site in teh presence of our architectual consulatns, the parties are unable to amicaby resolve said matter. Therefor your client is herby terminated."

Question: is this interpretted now that "all the work in the contract has been completed"? neither builder nor homeowner ever took action to say it was not completed. This quesiton arises because both builder and owner want to know if builders CGL policy will cover occurrences caused by subcontractors as work is complete per the "products-completed operations hazard" definition that work is complete if: "all the work caled for in your contract has been completed".

the second question is the other possibility under product-completed ops hazard, that most work was completed, but we do not know if it "was put to its intended use by any person or organization other than another contractor or subcontractor working on the same project", which further clarifies that work that may need service, maintenance, correction, repari or replacement, but which is otherwise complete will be treated as completed". if for example, owner began to use the basement for personal storage (even though the rest of the house was not finished and another contractor was hired to finish), then is the basement (or even the whole house) considered complete, because homeowner started to use it for storage before or after contract was "terminated". thank you
Hi, I am a moderator for this topic. I've been working hard to find a professional to assist you right away, but sometimes finding the right professional can take a little longer than expected.

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Wendy
Customer: replied 3 years ago.


Hi Wendy. yes, I will wait (better late than never) - but for me, timeis of the essence. Thanks alot, kathy

Thank you for your patience.I have marked your question as high priority, which alerts Experts that you need an answer quickly. We will continue the search for a professional for you.

Regards,
Wendy

Hello,

Customer service asked me to review your question. You asked:

Question: is this interpreted now that "all the work in the contract has been completed"? neither builder nor homeowner ever took action to say it was not completed. This question arises because both builder and owner want to know if builders CGL policy will cover occurrences caused by subcontractors as work is complete per the "products-completed operations hazard" definition that work is complete if: "all the work called for in your contract has been completed".

A: Were the dispute to be subjected to either mandatory contractual arbitration or court litigation, the arbitrator/judge would look at the substance of the agreement as to whether or not the contract is completely performed. In the construction industry, this is called "substantial performance," which means that a contract which is clearly performed in practically all of its material aspects, cannot be disaffirmed or repudiated merely because of some procedural technicality. See, e.g., R. Krevolin & Co. v. Brown, 20 N.J.Super. 85 (1952).



In short, if the builder does what was required under the contract, then the builder is entitled to be paid for the value of the services provided, even if there may be some minor issues which remain unsatisfied.

As for whether or not general liability insurance will cover subcontractors who are unpaid due to the property owner's "termination" of the contract, that's a question of insurance policy interpretation. I would start by simply asking the insurer to determine whether or not there is a claim payable, and if not, then why not. It's too difficult to determine the potential result without getting the insurer to weigh in on its position. Once you know where the insurer stands and why, you can examine the policy terms and see if the insurer is trying to escape by making an unreasonable argument not supported by the facts or the policy terms.

the second question is the other possibility under product-completed ops hazard, that most work was completed, but we do not know if it "was put to its intended use by any person or organization other than another contractor or subcontractor working on the same project", which further clarifies that work that may need service, maintenance, correction, repair or replacement, but which is otherwise complete will be treated as completed". if for example, owner began to use the basement for personal storage (even though the rest of the house was not finished and another contractor was hired to finish), then is the basement (or even the whole house) considered complete, because homeowner started to use it for storage before or after contract was "terminated". thank you

A: This is really the same question, in my opinion. "Substantial performance" would suggest that if the builder has done practically everything required, and the owner is moving personal property into the building, then this is evidence that the owner believes the construction is substantially complete. Otherwise, there would be no certificate of occupancy likely to issue from the local government, and no right to being moving into the property.

Hope this helps.

Customer: replied 3 years ago.


Hi, that did not really answer my question. but based on your answer, I only need to revisit the first part. the contract was not complete, so the question is, does this specific language in the contract:


"Both builder and owner will make best efforts to amicably resolve any disagreements. Upon written notice, eac will be give 2 wqeeks to provide a plan to resolve any issues that might arise. An additional 2 weeks will be given to agree upon a plan. Both must agree on the plan going forward to ensur contractual agreements and plan specifications are carried out." -- allow us to consider the contract complete, since the contract says we must agree on how to proceed when we disagree. Since we could not agree, the contract was terminated. Does this make the builders work complete according to our specific contract? thank you

In my original answer, I stated, "Were the dispute to be subjected to either mandatory contractual arbitration or court litigation, the arbitrator/judge would look at the substance of the agreement as to whether or not the contract is completely performed."

Your question suggests that because there is a provision to terminate the contract early, then the contract is complete. This may be true, but the issue remains that if the contract was for X services in exchange for $Y, and termination occurs when only a portion of X is complete, then a court is not going to award $Y, because the X services contracted for were not "substantially performed."

If the builder remains ready to perform the contract, then the owner would not be relieved of the obligation to pay for the remainder of the contract, unless the court were to find that the parties were too far apart to be able to work together going forward. Assuming that the court were to so find, then the builder would likely be permitted to be paid for the reasonable services rendered under the contract -- but not for the full contract price.

BotXXXXX XXXXXne, yes, you can reasonably argue that the contract is completed, though terminated early. However, that legal argument will not get you paid in full -- if that's your goal.

Hope this helps.
socrateaser, Lawyer
Category: Legal
Satisfied Customers: 38440
Experience: Retired (mostly)
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Customer: replied 3 years ago.


thank you very much (sorry took so long to reply) - that is helpful.

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