Masonry Magazine June 1988 Page. 12
Construction Contracts
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ligation to pay the subcontractor any sums due it until such time as the general contractor receives payment from the owner. While the majority of states hold that this is merely a provision which requires the subcontractor to wait a "reasonable period of time" for its payment and if the general contractor does not receive its payment from the owner or does not make the payment to the subcontractor within that reasonable period of time, the general contractor is obligated to make the payment to the subcontractor. A minority of states, including Illinois, have held a contingent payment clause to be a strict condition precedent which now puts the subcontractor in these states in the position of being the ultimate banker. If, for example, the general contractor is not paid due to a dispute for which the particular subcontractor is not at fault, it may never receive payment and those states which hold the contingent payment clause to be a strict condition precedent bar the subcontractor's recovery. This is a particularly draconian provision which impacts severely on subcontractors, many of whom are thinly capitalized, and who will find that the payments that they have been waiting for are no longer available.
4. No Damage for Delay. Customarily, this provision provides that while the subcontractor is not entitled to a claim for delay damages, it will be entitled to an extension of time. I submit that this is only a partial solution to the problem as the extension of time may overlap two union contract periods, thereby increasing the overhead and labor costs in the extended period as well as the potential for increase in prices from the material suppliers who now must furnish materials in the extended period. Any subcontractor should require that a no damage for delay clause be stricken and that any claim for damages include additional compensation required therefrom in addition to the extension of time. A caveat- any provision should be acceptable to the general contractor if it permits the no damage for delay to be imposed as a result of the subcontractor's fault. However, where the subcontractor is not at fault, the foregoing modifications should be considered.
5. Design Responsibility. Unfortunately, we are finding that shop drawings and other design responsibilities are being shifted to the subcontractor and the subcontractor's suppliers, i.e., window treatments, curtain wall, drywall installation and equipment design. In addition, one should be aware of any imposition on the subcontractor to advise the architect and owner of any deficiencies in the architect's plans. The subcontractor is not a design professional, and it does not carry design error and omissions insurance. There is a continuing debate over the responsibility for shop drawings and, unfortunately, there is no clear line of responsibility for the liability which would attach for defective shop drawings. One must advise the subcontractor that it may very well find itself in the design business and should so advise its employees doing shop drawings.
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The 544 Material
Handler reaches new heights.
Five full stories in fact.
GRADALL
We're talking apples and oranges.
YOU CAN REACH NEW PRODUCTIVITY HEIGHTS WRITE THE GRADALL COMPANY, 406 MILL AVE SW, NEW PHILADELPHIA, OHIO 44863 OR PHONE (216) 339-2211
12 MASONRY-MAY/JUNE, 1988