Construction Law Newsletters

Contract Modification Versus a Cardinal Change

Contract modifications and cardinal changes are separated by degree. In the construction industry, contract modifications are quite common and basically consist of minor or slight changes to the parties' existing agreement within the scope of such agreement. A cardinal change is so severe as to be beyond the scope of the existing agreement such that an entirely new contract, with all the attendant formalities, is required.

Cost-Plus Contracts

A cost-plus construction contract generally obligates the owner to pay for the costs associated with the construction project and a fee for the contractor's services on the project.

Owner's Selection of Architect and Contractor

Among the owner's chief concerns to ensure the successful completion of a construction project is the selection of the project's architect and general contractor. Without such key personnel in place the project would never get off the ground. Further, ensuring the quality of workmanship on the project starts with the architect's design of the plans and specifications and carries forward through the actual construction process under the auspices of the contractor.

Third-Party Claims Against Retainage Funds

Retainage funds do not only serve as a protective mechanism for an owner on a construction project. Third parties may also benefit from the funds that have been earned by the contractor, but withheld pending completion of the construction project. Third parties may seek to satisfy a contractor's outstanding indebtedness out of the retainage funds.

Variances

Though zoning laws restrict the way a parcel of land can be used, property owners can seek a variance, or exception, from such laws based on unnecessary hardship. This hardship cannot be one that is self-induced. There are two types of variances: area variances and use variances.