Business Law

Ask a Business Lawyer. Get Business Law Questions Answered ASAP.

Ask a Lawyer,
Get an Answer ASAP!

Business Law
This answer was rated:

Hi, We are a small general contractor who normally does business

with property management companies to...
Hi, We are a small general contractor who normally does business with property management companies to improve the spaces their tenants are about to occupy. History has shown, repeatedly, that when we do work directly for the tenant that things can sour quickly. We have completed $3,000 of a $9,000 contract on a 'hand shake' (don't get me started on how angry I am about that!), anyway, before continuing we are trying to hash out a contract before completing the remaining work. We are already getting an uneasy feeling from the customer with statements like saying, "well, that should have been included so you should include it for the same price". We created a general short form contract, to which they provided the following "addendum". I responded with the additions that are in CAPS. They have now responded with the following statement:
"The changes to Section 1 and Section 2 are acceptable. The change to Section 3 is not acceptable, as the contractor’s insurance must in all circumstances be primary to DPI’s insurance, which is non-contributory."

Here is the Addendum. Please review Section 3 and let me know what you think.
NOT ENOUGH ROOM IN QUESTION BOX FOR WHOLE ADDENDUM....

3. Notwithstanding anything contained in Section 14 or elsewhere in the Contract to the contrary, Contractor shall at all times carry comprehensive general liability insurance, including but not limited to coverage for product liability, contractual liability, and business operations, with limits of not less than $1,000,000 per occurrence/ $2,000,000 annual aggregate for bodily injury and property damage; employer's liability of not less than $1,000,000 each incident; workers' compensation as required by statute; and riggers liability and automobile liability insurance for any owned or leased automobiles with limits of not less than $1,000,000 per occurrence for bodily injury and property damage. Owner shall be named as an additional insured on the liability policies. Contractor’s insurance, and its contractors’ and subcontractors’ insurance shall be primary and Owner’s insurance will not contribute with any such Contractor or its contractor’s and subcontractor’s insurance for any reason OTHER THAN WILLFUL MISCONDUCT OR GROSS NEGLIGENCE ON BEHALF OF THE OWNER AND/OR OWNER AFFILIATES. Further, Contractor for itself and for its insurance company shall waive all rights of subrogation against Owner and all Owner Affiliates under any Workers' Compensation policy. As a condition of the execution of the Contract by Owner, evidence of the coverage described herein in a form reasonably acceptable to Owner shall be provided to Owner by Contractor prior to commencement of any work on Owner’s premises by Contractor or anyone. In no event shall Contractor’s liability be limited by insurance maintained by Contractor, required hereunder or otherwise.
Show More
Show Less
Ask Your Own Business Law Question
Answered in 40 minutes by:
10/21/2013
Legalease
Legalease, Attorney
Category: Business Law
Satisfied Customers: 16,385
Experience: 14 years experience corps, LLC's and partnerships; preparation, negotiation of complex contracts and business agreements
Verified

Hello there Wendy --

-

The language that you have asked to be added (or you have added) to Section 3 is actually very standard in the construction industry and it is language that I would insist upon myself if I were handling the contract. Your insurance will not pay for any claims made due to the owner's misconduct or gross negligence (in fact, no insurance company will pay any claim of any insured if another party committed willful misconduct or gross negligence -- it simply does not happen). My husband is also a contractor and I am very familiar with smaller construction / remodeling contracts of this nature. It seems to me that the owner simply does not understand that whether this language is in the contract or not, if the owner is found to be grossly negligent or commits an act of willful misconduct, your insurance company will simply refuse to pay the claim and the insurer is legally within their rights to refuse to pay the claim -- leaving the plaintiff party or parties bringing suit to file a lawsuit against the owner directly. If the owner is going to be stubborn about this language due to failure to understand it, and refuses to let you add that into the paragraph, the practical effect of it is as follows (a) as I said, the insurer will not pay the claim anyway - that is a standard exclusion in your policy and the policies of any subcontractors and there is no way you can purchase additional coverage to cover these items -- it does not exist - so a lawsuit CAN be filed against the owner, (b) such a liability scenario is extremely rare - owners do not generally do anything at the property that would amount to anything more than standard negligence - it must be a situation such as the owner committing arson and setting his own property on fire before it gets to the "willful misconduct" phase and be excluded from coverage under the contractor policy -- so you may consider the benefits/futility of arguing with the homeowner when the homeowner either will deliberately or ignorantly continue to not understand the situation and the likelihood of anything like this happening is very, very rare.

-

My suggestion here is to simply try to explain to the owner that whether the language is in section 3 or not, there is not a contractors insurance company in business that will cover the gross negligence or willful misconduct of the owner of the property and by adding the language it is standard to simply put the owner on notice that such coverage does not exist in the real world. If that does not work, then you should decide whether you want to move forward without the language, given the fact that it really doesn't matter because the insurer will not offer coverage under those circumstances anyway.

-

And, you have my sympathies. I have seen this many times with my husband - every person who hires him wants him to throw additional work in for free (he calls it the "while you are here" attitude -- "while you are here, can you do this or that for the same price? It shouldn't cost anymore money because you are here anyway and you are opening that wall anyway" .............. I could go on forever, but I won't).

-

MARY

-

Please press the 3rd, 4th or 5th smile face below so I will be paid for my time. I am not paid anything unless you press a positive rating below. Pressing the 3rd, 4th or 5th smile face below will not cost you any additional money -- it simpy acts as a trigger to Just Answer to pay me for my time. THANK YOU

Ask Your Own Business Law Question

Hello again Wendy -

-

I note that you viewed the answer about 20 minutes ago. Do you have any further questions for me on this issue? If not, can you please press a positive rating underneath this ANSWER box so I will be paid for my time? I truly am paid nothing unless you press the 3rd, 4th or 5th smile face below (we do not receive paychecks - we are paid per question accepted with a positive rating). THANK YOU VERY MUCH

-

MARY

Ask Your Own Business Law Question
Customer reply replied 4 years ago

Hi Mary,


 


Thank you for the answer and explanation.


 


I immediately emailed my insurance broker to see if the same applies to our policy - not sure if it makes any difference but the client is a business and the work to be done is commercial construction at the business location. Is it the same commercial & residential?


 


Thank you, Wendy

Hello Wendy -

-

There is no difference between commercial and residential work when it comes to this particular clause. In fact, I first learned to request the same language in contracts when I worked on larger commercial projects for the firms I worked for in Boston and NYC. Then when I opened my own practice I notice that it is pretty standard in smaller projects as well. I would not call this a deal killer if the owner refuses to put it in the contract because, as I said, a court will hold the owner responsible for gross negligence or willful misconduct (that is the legal standard) and the insurers know this so the insurers simply refuse to pay the claim if that is what it is based upon -- and, as I said -- it is extremely rare that something happens due to the gross negligence or willful misconduct of any party to the contract, including the owner.

--

MARY

Ask Your Own Business Law Question
Customer reply replied 4 years ago

Thank you for coming out and saying you don't think it should be a deal killer. I appreciate you stating that clearly as well as the law on gross negligence.


 


You have been great. Thank you, Wendy

No problem. If you have not done so already, I would appreciate it if you would press a positive rating below so I will be paid for my time assisting you today. THANK YOU

-

MARY

Legalease
Legalease, Attorney
Category: Business Law
Satisfied Customers: 16,385
Experience: 14 years experience corps, LLC's and partnerships; preparation, negotiation of complex contracts and business agreements
Verified
Legalease and 87 other Business Law Specialists are ready to help you
Ask your own question now
Ask Legalease Your Own Question
Legalease
Legalease
Legalease, Attorney
Category: Business Law
Satisfied Customers: 16,385
16,385 Satisfied Customers
Experience: 14 years experience corps, LLC's and partnerships; preparation, negotiation of complex contracts and business agreements

Legalease is online now

A new question is answered every 9 seconds

How JustAnswer works:

  • Ask an ExpertExperts are full of valuable knowledge and are ready to help with any question. Credentials confirmed by a Fortune 500 verification firm.
  • Get a Professional AnswerVia email, text message, or notification as you wait on our site. Ask follow up questions if you need to.
  • 100% Satisfaction GuaranteeRate the answer you receive.

JustAnswer in the News:

Ask-a-doc Web sites: If you've got a quick question, you can try to get an answer from sites that say they have various specialists on hand to give quick answers... Justanswer.com.
JustAnswer.com...has seen a spike since October in legal questions from readers about layoffs, unemployment and severance.
Web sites like justanswer.com/legal
...leave nothing to chance.
Traffic on JustAnswer rose 14 percent...and had nearly 400,000 page views in 30 days...inquiries related to stress, high blood pressure, drinking and heart pain jumped 33 percent.
Tory Johnson, GMA Workplace Contributor, discusses work-from-home jobs, such as JustAnswer in which verified Experts answer people’s questions.
I will tell you that...the things you have to go through to be an Expert are quite rigorous.

What Customers are Saying:

Mr. Kaplun clearly had an exceptional understanding of the issue and was able to explain it concisely. I would recommend JustAnswer to anyone. Great service that lives up to its promises!

Gary B.Edmond, OK

My Expert was fast and seemed to have the answer to my taser question at the tips of her fingers. Communication was excellent. I left feeling confident in her answer.

EricRedwood City, CA

I am very pleased with JustAnswer as a place to go for divorce or criminal law knowledge and insight.

MichaelWichita, KS

PaulMJD helped me with questions I had regarding an urgent legal matter. His answers were excellent.

Three H.Houston, TX

Anne was extremely helpful. Her information put me in the right direction for action that kept me legal, possible saving me a ton of money in the future. Thank you again, Anne!!

ElaineAtlanta, GA

It worked great. I had the facts and I presented them to my ex-landlord and she folded and returned my deposit. The 50 bucks I spent with you solved my problem.

TonyApopka, FL

Wonderful service, prompt, efficient, and accurate. Couldn't have asked for more. I cannot thank you enough for your help.

Mary C.Freshfield, Liverpool, UK

< Previous | Next >

Meet the Experts:

Infolawyer

Infolawyer

Attorney

1,793 satisfied customers

Experienced lawyer

Dimitry K., Esq.

Dimitry K., Esq.

Attorney

1,611 satisfied customers

Run my own successful business/contract law practice.

MShore Law

MShore Law

Attorney

1,233 satisfied customers

Drafted Negotiated and/or Reviewed Thousands of Commercial Agreements

RGMacEsq

RGMacEsq

Attorney

742 satisfied customers

Licensed Texas General Practice Attorney

Barrister

Barrister

Attorney

640 satisfied customers

17 years practicing attorney, JD, BA, MBA

Ely

Ely

Attorney

564 satisfied customers

Counselor at Law.

J.Hazelbaker

J.Hazelbaker

Attorney

393 satisfied customers

Experienced and trained in the area of business law.

< Previous | Next >

Related Business Law Questions
My business partner has his minority business enterprise
my business partner has his minority business enterprise license as well as several other minority accreditations. we have contacts on both the manufacturing and federal government levels. we want to … read more
Infolawyer
Infolawyer
Attorney
Doctoral Degree
1,793 satisfied customers
I have a business contract and tax issue that is longer than
I have a business contract and tax issue that is longer than the characters allowed here. Any tax attorney with business contract experience in Los Angeles, California. I will need a email address to … read more
N Cal Atty
N Cal Atty
Doctoral Degree
59 satisfied customers
I need a simple contract to define a business relationship
I need a simple contract to define a business relationship between a consultant and our company. Essentialy the consultant is willing to work for a % of ownership in lieu of payment. I need a contract… read more
NYLAWLADY
NYLAWLADY
attorney solo practice nyc
Doctoral Degree
685 satisfied customers
Is it regular practice to name a old debtors as defendants
is it regular practice to name a old debtors as defendants in a new Fraudulent conveyance case??… read more
Infolawyer
Infolawyer
Attorney
Doctoral Degree
1,793 satisfied customers
Regarding terminating a business contract with a billing
Regarding terminating a business contract with a billing company that processes our billing. Both I and my partner signed contract as required by our Operating Agreement for the business . The billing… read more
LegalGems
LegalGems
Juris Doctorate
10,163 satisfied customers
I am in Connecticut and I started a medical practice as an
Hi I am in Connecticut and I started a medical practice as an LLC with my brother with both of us as 50/50 members. The LLC is located in a building. Currently we are have a disagreement and I am wond… read more
Damien Bosco
Damien Bosco
2,990 satisfied customers
Federal Goverment Contracting Trying to structure a business
Federal Goverment Contracting Trying to structure a business by dove tailing two existing businesses whereas one owner is a Service Disable Veteran Small Business and the other is considered a large b… read more
Jim Reilly
Jim Reilly
Private Practice Attorney
Juris Doctor
1,759 satisfied customers
We won a tentative decision on a business to business
We won a tentative decision on a business to business lawsuit for over $1MM. There is also a punitive damage award for hundreds of thousands of dollars on top of the million dollar tentative decision … read more
socrateaser
socrateaser
1,031 satisfied customers
I'm starting a general contracting business in Chicago. I'm
Hello. I'm starting a general contracting business in Chicago. I'm considering forming an LLC as a holding company for future DBAs for each part of the business, including construction, cleaning/maint… read more
Roy Hadavi
Roy Hadavi
Attorney
Juris Doctorate
886 satisfied customers
This is a question about compliance for medical practices
This is a question about compliance for medical practices and chiropractors. We have a med spa business concept that involves offering our brand, access to pharmaceutical discounts, and expertise to h… read more
Asad Rahman
Asad Rahman
Attorney
J.D.
2,195 satisfied customers
I would like to write up a business sale contract of some
I would like to write up a business sale contract of some parts I sold to be paid in 2 years. Do you offer such custom contract?… read more
Asad Rahman
Asad Rahman
Attorney
J.D.
2,195 satisfied customers
Can a medical doctor operate in a private practice owned by
Can a medical doctor operate in a private practice owned by her medical doctor spouse, as an extender and be paid a salary as opposed to being paid fee for service? We are in the state of TN. … read more
lawyerJ
lawyerJ
Juris Doctorate
125 satisfied customers
I own a small business, when bought I had a contract with my
I own a small business, when bought I had a contract with my brother he gets 25% and my mom gets 25%. However he has never paid taxes on the money I've given him and my mother and now he says he wants… read more
Barrister
Barrister
Attorney
Doctoral Degree
640 satisfied customers
I have an investment contract with a local business. I was
I have an investment contract with a local business. I was suppose to get 30% of profits monthly. They have defaulted on the agreement. What can I do? … read more
Roy Hadavi
Roy Hadavi
Attorney
Juris Doctorate
886 satisfied customers
Question about business/contract law breach of contract and
question about business/contract law breach of contract and file a complaint I like to consult with an attorney preferably from ILLINOIS… read more
Damien Bosco
Damien Bosco
2,990 satisfied customers
I took out a business contract which ran for 5 years and
I took out a business contract which ran for 5 years and included insurance via separate insurers. I received no insurance policy documents at the time of signing. Both companies are regulated by the … read more
Infolawyer
Infolawyer
Attorney
Doctoral Degree
1,793 satisfied customers
I have a business/contract law question. I had a hearing in
I have a business/contract law question. I had a hearing in Superior Court with another business. We mutually agreed to remove our negative online reviews from each other's sites, three weeks ago. I h… read more
Infolawyer
Infolawyer
Attorney
Doctoral Degree
1,793 satisfied customers
Is a contract from a business that can not be found in the
Is a contract from a business that can not be found in the database of the Secretary of Texas (we think it's a fake company) valid and enforceable? … read more
RGMacEsq
RGMacEsq
Attorney
Doctoral Degree
742 satisfied customers

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

DISCLAIMER: Answers from Experts on JustAnswer are not substitutes for the advice of an attorney. JustAnswer is a public forum and questions and responses are not private or confidential or protected by the attorney-client privilege. The Expert above is not your attorney, and the response above is not legal advice. You should not read this response to propose specific action or address specific circumstances, but only to give you a sense of general principles of law that might affect the situation you describe. Application of these general principles to particular circumstances must be done by a lawyer who has spoken with you in confidence, learned all relevant information, and explored various options. Before acting on these general principles, you should hire a lawyer licensed to practice law in the jurisdiction to which your question pertains.

The responses above are from individual Experts, not JustAnswer. The site and services are provided “as is”. To view the verified credential of an Expert, click on the “Verified” symbol in the Expert’s profile. This site is not for emergency questions which should be directed immediately by telephone or in-person to qualified professionals. Please carefully read the Terms of Service (last updated February 8, 2012).

Show MoreShow Less

Ask Your Question

x