Generally, it's safe to assume when someone does work on a construction project, that person will expect to be paid. How soon that obligation to pay arises, however, is likely determined by the contract between the parties. In some cases, when it comes to a prime contractor paying its subcontractors, that obligation might never arise.
It's generally safe to assume people intend to finish what they've started. When parties don't see a project to completion, however, contract law will usually provide remedies. But what if that nonperformance is the result of matters beyond the parties' control? In that case, construction contracts only operate to bail out a nonperforming party if they contain a "force majeure" or similar clause.
Last month we wrote about some of the potential liability construction businesses can avoid by hiring licensed contractors. We noted that it would be shortsighted for businesses to see hiring unlicensed contractors as a way to reduce project costs. But what happens when workers misrepresent their status as licensed contractors to persuade you to hire them? Unfortunately, some victims in Oregon are finding out the hard way.
Last week we wrote about some of the unique qualities of Oregon's Prompt Payment Statute that provides recourse for construction subcontractors and contractors when an owner or contractor fails to pay on time. Though it can be particularly harsh, the statute's penalties will not always apply all of the time.
If there's one thing every person in the construction business knows, it's that you can expect delays in completing any project. But those delays aren't always the result of a negligent contractor, or unexpected costs. Sometimes, an owner or lead contractor can create delays by significantly changing a project or by not providing the proper working conditions. Disruptions like these may entitle a contractor to be paid for additional costs incurred as a result of the disruption.
As we've recently highlighted, the Construction Contractors Board and Oregon OSHA seem to be ramping up enforcement of their respective authorities under Oregon law. Where rules contain mostly black-and-white requirements for owners and contractors, as well as harsh enforcement options, the CCB has found the perfect place to flex its authoritative muscles. One such area is the CCB's enforcement of Oregon's Prompt Pay Act.
We've previously discussed some of the costs that come with changing or cancelling construction contracts. Sometimes circumstances change that makes these costs unavoidable. But, where the contract need not be rewritten or cancelled, most of the costs resulting from construction contract disputes can be avoided. Though it sounds like a no-brainer, the best way to avoid these costs is to have carefully drafted contracts, written to anticipate circumstances that may change each party's position.
We recently discussed the Oregon Occupational Safety and Health Division's crackdown on construction project safety hazards. Today we want to elaborate on its efforts, and address Oregon OSHA's top ten safety violations for 2013, as published in its February 2014 newsletter.
In somewhat startling contrast to the uptick in 2013 commercial and residential construction spending we recently wrote about, the outlook for Oregon in 2014 might not be as positive. The annual business outlook report by the Associated General Contractors of America revealed a split in sentiment as to Oregon's commercial construction spending projections for the remainder of this year. This murky outlook, however, could mean 2014 is just the right time to put your project in motion.