lecture 13 Flashcards
- is a demand or assertion by one of the parties seeking, as a matter of right, payment of money or other relief with respect to the terms of the contract. (AIA A201)
- It is a demand or assertion by owner or contractor seeking an adjustment of contract price or contract times, or both, or other relief with respect to the terms of the contract.(EJCDC C700)
- It is a request for compensation for dealing with a situation that differs materially from what was anticipated by the parties at the time of entering into the contract.
- It is an entitlement for a change observed in the contract administration process
- It can be a claim for restitution, which includes financial compensation or reimbursement
- It can be a claim for extension of time
- It can be a claim for acceleration
Claims
If not resolved amicably, a claim can become a _____.
dispute
Generally, ____________ usually result in claims.
Contract document modifications
Three sources of claims may occur on a project.
- They include claims by the contractor (often on behalf of their subcontractors and suppliers) against the owner,
- and claims by the owner against the contractor or the A/E.
- The third source is a claim initiated by someone other than a party to the construction contract.
A contractor prepares pricing based on the _________ and other factors that are reasonably foreseeable at the time.
procurement documents
If, during the course of the project, the contractor encounters conditions contrary to those stipulated or inferred in the contract documents, a ____ may be initiated.
claim
Change conditions include:
- Active interference by the owner or A/E
- Conditions beyond the control of either the contractor or the owner
- Unknown or concealed conditions that affect the extent of the work
- Modifications made to the contract documents 5. Errors and omissions in the contract documents
The contractor is required to provide clear documentation that a changed condition actually was not ________ at the time of pricing and resulted in demonstrable damages.
not foresseable
Claims resulting from changed conditions may also be submitted by the _______ on behalf of the contractor’s subcontractors and suppliers.
contractor
In claims involving breach of contract, the contractor must __________________ by the other party.
document nonperformance
Two types of claims relating to breach of contract are .
- claims for untimely payment or nonpayment and
2. claims for improper or ineffective construction contract administration
Why would the Owner make a Claim?
- Correction of nonconforming or defective work
- Repair of damages to existing property
- Liquidated or compensatory damages for late performance
- Ineffective management and/or control of the work by the contractor resulting in added costs.
Ineffective management and/or control of the work by the contractor resulting in added costs for:
- Inordinate re-reviews of shop drawings
- Reviews of substitution requests
- Interferences with the owner’s operations
- Additional site visits, inspections, and related administrative time
- These types of claims are also grounds for withholding payment. It is important that the owner understand that the general conditions require the party initiating the claim to provide documentation establishing the claim.
- Therefore, the owner should carefully document such claims, attempt to settle the claim, and unilaterally withhold payment only as a last resort to satisfying the claim.
Owner’s claims
An example could be the excessive settlement or cracking of an existing building foundation where an adjacent excavation caused unstable soil conditions to occur.
third party claim
Under the provisions of ________, the contractor agrees to indemnify the owner and A/E against all thirdparty claims resulting from the contractor’s performance of work on the project.
AIA Document A201 and EJCDC C-700
Third party claims may not require a privity of contracts, and are therefore often filed as ___.
torts
Generally, _____ arise from construction activities that affect the interests of others in areas adjacent to or in the vicinity of the project.
third-party claims
Injury or death to persons and property damage claims are high on the list in terms of frequency and severity.
Third-party claims
Standard forms of contracts usually contain ______ reserving the rights and identify the responsibilities of the owner, contractor, and A/E.
provisions
- As discussed before, under the legal concept of privity of contract, only the contractor and the owner may make a claim against the other.
- Therefore, subcontractors, suppliers, and other participants (second or third tiers) rely on the __________ to pursue claims on their behalf.
general or prime contractor (first tier)
- Owner, contractor, and A/E all have a responsibility to administer claims in a timely and effective manner. 2. Early notification by the party making the claim and prompt handling of the claim help to minimize the _________.
effect of the claim
_________ identify a structured methodology for initiating and resolving claims expeditiously.
AIA general conditions
Standard general conditions establish the A/E as the _______ of the contract documents.
impartial interpreter
The AIA general conditions require that a claim be submitted to the _________.
“initial decision maker.”
The initial decision maker may be an entity identified in the contract documents who is _______.
not the architect.
All claims are initially decided by the ______ depending on the prior agreements, and if either party takes exception to the decision of the decision maker, the claim may be negotiated, mediated, arbitrated, or litigated between the parties as provided for in the contract documents.
initial decision maker or the A/E
Time limits for initiating claims are established in the ____________ to promote timely claim resolution.
general conditions
________ is also a right reserved for the claim recipient so that they have an opportunity to mitigate the consequences of the claim.
Timely notification
Parties are discouraged from accumulating claims or delaying responses to claims by stipulations that result in the _____ if the time limits are exceeded.
forfeiture of rights
Stipulates a time limit for submitting claims involving adjustment of contract sum or contact time, and require the A/E to make an initial response within a specified period of time. Under both documents, claims are submitted in writing.
AIA Document A201
The ___ may request additional information, submit a schedule for resolution to which the parties may agree, or propose other actions that would initiate new time frames
The A/E
Claim resolution action plans establish a system for:
- Prioritizing claims and promptly submitting detailed documentation for evaluation
- Identifying parties with responsibility and authority for settling claims
- Advancing the claim to a higher authority when the initial parties are in dispute
Encourage claim resolution at the lowest possible and appropriate level. Can also help to reduce the time needed to reach resolution and lower the tensions that can lead to unresolved claims that become disputes
Action plans
The procedures for processing and settling claims are ________ based and focused on timely and equitable resolution.
contractually
A claim should be initially addressed by reviewing the contract documents to determine ______.
entitlement
Once entitlement is established, __________ should be determined and documented as required by the contract documents.
cost or time adjustments
Contractual requirements may be _____ if mutually agreed to.
waived
is defined as the right to benefits specified by law or contract.
Entitlement
The contractor’s entitlement to a claim involves two separate determinations.
- First, the claim is evaluated to determine whether the contract documents adequately identify the claim as being within the contractor’s contractual obligations. If the work in question is found not to be reasonably inferred, the contractor is entitled to a contract modification. If the work in question is found to be reasonably inferred, the entitlement to the claim is denied.
- The second determination of contractor entitlement is the timing of the claim. The general conditions require the contractor to notify either the A/E or the owner before performing extra work. Failure to properly notify the A/E and the owner can result in a forfeiture of entitlement to the claim.
involves determining whether the work in question required of the contractor may be reasonably inferred from the contract documents.
Owner entitlement
If the work in question may be reasonably inferred, the owner’s claim may be ____ without a modification of the contract.
upheld
If the work in question cannot be reasonably inferred, the owner’s claim is ____ and the work in question is either dismissed or provided for as a contract modification.
denied
- Weather and meteorological reports
- Soil and geotechnical reports
- Meeting minutes
- Testing results and sampling procedures
- Job diary and field observation reports
- Accident and incident reports
- Progress photographs and videos
- Approved schedules
- Correspondence between different parties
- Methods of measurement
- Currency exchange rates
claim documentation
