Construction Contracts

Hahn Loeser’s Construction Team is a proud leader in a major victory for Ohio contractors and their sureties. The Fifth District Court of Appeals of Ohio issued a recent decision confirming that Ohio’s construction statute of repose, R.C. 2305.131, applies to breach of contract claims. It also confirmed that sureties are entitled to rely on the statute of repose as a defense to claims under the bond.

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Steel and other construction material tariffs necessitate careful evaluation and allocation of project cost and schedule risks. For example, when steel costs increased suddenly based solely on presidential executive orders, the building trades and owners saw drastic increases in costs, shop drawing review times and delivery dates. In many instances, contract documents failed to account for such risks.

Another factor that can significantly increase the price of material, and even the market price for labor, include catastrophic weather events. When bad weather occurs, contractors may no longer be able to obtain the material at originally budgeted pricing, or secure necessary labor forces to perform the work. Labor and material shortages domino into project delays, potential liquidated damages and claims.


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While electronic funds transfer is considered a convenient and quicker way to process payments and receive funds on construction projects, this practice presents significant risk to project participants. Contractual and processing controls are necessary to prevent fraud, which is on the rise locally and nationally.

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Many of us have heard the old saying that “decisions are made by those who show up.” The Ohio Facilities and Construction Commission (“OFCC”) is currently giving design and construction professionals involved in the construction of public schools the opportunity to show up, or more accurately speak up, to provide comments on contract general conditions and specifications of OFCC, including those in the Ohio School Design Manual (“OSDM”), as well as on the materials and methods of design used in the OSDM. This comment period offers industry professionals an important chance to provide input on the construction documents that control school construction projects throughout Ohio. It is crucial that design and construction professionals take this opportunity to give its opinion on current issues, as well as potential issues that may impact the industry in the coming years. Interested parties have until February 15, 2019 to submit comments on materials and methods of design used in the OSDM, and until March 1, 2019 to provide comments on OFCC’s contract documents.

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Strict Application of Claims Waiver Provisions Bars Surety Payment Claims

In Berkley Ins. Co. v. Kent State Univ., Ohio Ct. of Cl. No. 2018-00579JD (Jan. 14, 2019), the Ohio Court of Claims expanded its prior rulings strictly enforcing contract dispute resolution provisions in the public construction contract arena. The Court ruled, despite the circumstances that actually existed between the contracting parties, that a contractor’s surety who takes over and completes a project after the contractor’s default and termination is likewise bound by the contract’s dispute provisions. The ruling reinforces the significant risk of waiver of claims by contractors and their sureties when claims are not promptly submitted in accordance with contract provisions governing disputes, even though all parties are aware of the dispute and claim.


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