ABA Under Construction New 2004-08

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Page 1: ABA Under Construction New 2004-08

By Robert Smith

While there are a number of problemsthat a contractor can expect itssubcontractors to create on any

given project, few contractors expect thatcriminal charges and jail time are amongthose problems. A recent case in Minnesota,however, caused many contractors – and, inparticular, the owners and managing agentsof those contractors – to pause and ponderwhether the faulty work of subcontractorscould ultimately lead to criminal liability.

In State v. Arkell, the CEO and owner ofCarriage Homes, John Arkell, was sentencedto 90 days in jail for violations of theMinnesota State Building Code that had beencaused by subcontractors of Carriage Homes.After the Minnesota Court of Appeals upheldthe trial court, the Minnesota Supreme Courtreversed Arkell’s conviction. See State v.Arkell, 672 N.W.2d 564 (Minn. 2003).Contractors throughout Minnesota breathed a collective sigh of relief.

The case arose out of a condominium devel-opment built by Carriage Homes. CarriageHomes hired subcontractors to build thedevelopment, but directly employed projectmanagers to oversee and supervise the day-to-day operations. After completion, some ofthe foundation elevations of the units werelower than permitted under the building code,which caused storm water to pool in theunits’ driveways and garages.

The city’s development director notified

Mr. Arkell of the problem in a series of lettersover two years. Mr. Arkell notified the subcon-tractors, who failed to fix the problem. Whenthe problem remained unresolved, the countyattorney charged both Carriage Homes andMr. Arkell with three misdemeanor countsunder a statute making it a misdemeanor toviolate the state building code. Mr. Arkell wasconvicted on one of the three counts andordered to pay a fine, pay restitution to thecondominium owners and serve 90 days in jail.On appeal, Mr. Arkell asked the MinnesotaCourt of Appeals to overturn his conviction.He first argued that he did not have the requi-site mens rea for a criminal conviction

UNDER CONSTRUCTIONT h e n e w s l e t t e r o f t h e A B A F o r u m o n t h e C o n s t r u c t i o n

A U G U S T 2 0 0 4

IN THIS ISSUE

CONTRACTORS CRIMINALLY LIABLEFOR THEIR SUBCONTRACTOR’S BADWORK?

Message from the Chair-Elect ..........2

Joint CheckAgreements................5

AGC Price-VolatilityAmendment................6

(continued on page 4)

NEW DIVISION STEERINGCOMMITTEE MEMBERS

The Forum would like to welcome the follow-ing new steering committee members:Division 1: John P. Carpenter and Pamela

Everett; Division 2: Stacy A. Butler; Division 3:Kristine A. Kubes, Joseph H. Jones and Jerome V.Bales; Division 4: Elizabeth M. Roat, Roy C. Fazioand John Willett; Division 5: Christopher M.Caputo; Division 6: Ursula L. Haerter; Division 7:Deborah S. Butera and Wm. Cary Wright; Division8: Wendy Kennedy Venoit; Division 9: Aaron P.Silberman and G. Edgar James; Division 10:Christopher Montez; Division 11: John W. O’Neil,Jr. and Tony Larsel Nolen; and Division 12: StanleyJ. Dobrowski and Calvin Gladney.

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UNDERCONSTRUCTION

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The newsletter of the ABA Forum on the Construction Industry

Vol. 6, No. 3 • August 2004

Newsletter EditorPatrick J. O’Connor, Jr.

2200 Wells Fargo CenterMinneapolis, MN 55402

612-766-7413fax 612-766-1600

[email protected]

Associate EditorElizabeth J. Anderson

3300 Wells Fargo Center90 South Seventh StreetMinneapolis, MN 55402

(612) 672-8387 fax (612) 642-8387

[email protected]

2004-2005 OFFICERS AND GOVERNING COMMITTEE

CHAIRJames Duffy O’Connor

[email protected]

CHAIR-ELECTDouglas S. Oles206-623-3427

[email protected]

IMMEDIATE PAST CHAIRJohn R. Heisse II

[email protected]

GOVERNING COMMITTEE MEMBERSAdrian L. Bastianelli

[email protected]

D. Robert Beaumont416-862-5861

[email protected]

Mark J. Heley952-841-0219

[email protected]

Kenneth R. Kupchak808-531-8031

[email protected]

Robert J. Macpherson212-269-2510

[email protected]

George J. Meyer813-223-7000

[email protected]

Krista Lee Pages202-371-5759

[email protected]

David A. Senter336-387-5126

[email protected]

Michael D. Tarullo614-462-2304

[email protected]

Fred D. Wilshusen214-369-3008

[email protected]

Under Construction is published by the American BarAssociation Forum on the Construction Industry, 321 N. Clark Street, Chicago, IL 60610. Requests for permission to reprint and manuscripts submitted forconsideration should be sent to the attention of theEditor, Patrick J. O’Connor, Jr. Address correctionsshould be sent to the ABA Service Center at theaddress above.

The opinions expressed in the articles presented inUnder Construction are those of the authors and shall not be construed to represent the policies of theAmerican Bar Association or the Forum on theConstruction Industry. Copyright © 2004 American Bar Association.

Doug Oles, Chair-Elect

MESSAGE FROM THE

I am greatlyhonored to beginmy term as yourChair-Elect bywriting thiscolumn. If myscope of workproves similar

to that of my recent predecessors, I will spend considerable timeanswering questions about howmembers can become moreinvolved in our association.Therefore, under the principle ofFRCP 33(d), I offer this article as asource from which the answer maybe derived or ascertained.

1. Participate in Forum Programs.The Forum typically begins planningits national programs roughly 18months in advance. Proposedoutlines are vetted through anexhaustive review process aimed atensuring that topics are fresh andwritten materials are both substan-tive and up to date. The results aresome of the country’s most highlyrated construction industry presenta-tions, offered at a variety ofinteresting cities across the UnitedStates.

Our next program in Tampa(October 21-22, 2004) will provideattendees with an extensive collec-tion of ancillary contract formscreated by some of the nation’smost experienced constructionpractitioners. On November 5,2004, the Forum will present itsone-day program on Fundamentalsof Construction in five new cities(Baltimore, Charlotte, Los Angeles,Minneapolis and New York). At ourwinter program in New York City(January 27, 2005), we will offera comprehensive outline of liability

insurance that every constructionpractitioner should know. At nextyear’s Annual Forum Meeting onApril 7-9, 2005, all twelve of ourDivisions will join in presenting awide selection of topics during thecolorful French Quarter Festival inNew Orleans.

In addition to their educationalcontent, Forum programs providevaluable opportunities to “network”with leading corporate counsel andconstruction consultants fromacross the U.S. Those who attendregularly will develop friendships andprofessional relationships that canbe invaluable when legal assign-ments involve other jurisdictions.With growing international participa-tion in our Forum events, the benefits of membership expand to forgingprofessional connections in foreigncountries as well. Speakers for eachprogram are typically selectedapproximately one year in advance.Division leaders can inform theirmembers about planned programtopics and may invite members tovolunteer as speakers. Speakers are generally required to submit aresearched paper in support of theirpresentations, and in some casesnon-speakers may contribute papersto a published program text. SinceJanuary 2002, each national Forumprogram has provided attendeeswith a CD-ROM disk in addition toprinted text materials.

2. Read Forum Periodicals.As a past editor-in-chief of TheConstruction Lawyer, I should admitto being a bit biased in touting itsvalue as America’s premier quar-terly law journal in the constructionindustry. What many readers do

CHAIRELECT

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Message from the Chair-Elect(continued from page 2)

not know is that articles in TheConstruction Lawyer typically

undergo rigorous editorial

compression so that readers can

benefit from their essential

content without having to read too

many pages (the same principle

famously used on the front page of

The Wall Street Journal). For an

index to articles in past issues1,

please visit the Forum website,

click on Publications, and scroll

down to click on the Index.

In addition to The ConstructionLawyer, the Forum publishes

Under Construction three times a

year. This newsletter provides

important notice of upcoming

programs, as well as reports on

late breaking legal developments

and reports on activities of the

Forum’s various Divisions.

3. Read Forum Books. Since 1997,

the Forum has published a growing

list of books, covering a broad

range of topics for litigators, trans-

actional lawyers, and everyone in

between. Because the Forum is

able to recruit authors from the

industry’s most experienced and

articulate practitioners, our books

have won critical acclaim and

achieved consistently strong sales.

For a list of currently available

titles, please visit the Forum

website and click on Publications.

4. Become Active in a Division.

The Forum encourages each of

its members to join and become

active in at least one of its twelve

Divisions. These Divisions promote

education and exchanges of infor-

mation in various areas of special

interest for construction industry

practitioners. At the Annual Forum

Meeting in the spring, each

Division hosts a breakfast meeting

for its members. At that meeting,

the Division discusses special

projects for the coming year and

often provides a guest speaker of

interest to Division members.

During the remainder of the year,

a select Steering Committee orga-

nizes special projects and recruits

interested members who volunteer

to participate in them. Individual

participation may consist of

planning a program workshop,

assembling a book, or providing

short articles informing other

members of new developments

of national importance.

5. Utilize the Forum Websites.

The Forum’s principal website is

found at www.abanet.org/forums/

construction/home.html (with

apologies to the Latin purists who

might point out that the plural of

“forum” is “fora”). All members

should have this address readily

accessible among their “favorite”

websites. In addition, the CD-ROM

from any of the Forum’s national

programs will give members

access to an extensive “eLibrary”

with links to literally masses of

resources for news and research in

the field of construction law.

6. Identify Yourself as a

Volunteer. Each year, there are

scores of new opportunities for

members to volunteer for useful

projects in the Forum. There are

programs to organize, papers (and

chapters of books) to write, and

there are Division projects to orga-

nize. If you wish to participate in

one of these projects, the best

starting point is to join one of the

Divisions and convey your interest

to the Division Chair. If you have

suggested contributions to one ofour periodicals, contact an editor ofthat publication. If you would liketo speak or contribute a paper to aprogram, contact one of the chairsfor that program (the Divisionchairs can provide names of theprogram chairs). If your firm wantsto be a sponsor of our Annual ForumMeeting, please contact the ForumChair (Jim O’Connor), the PastChair (John Heisse) or myself.

Adapting the famous words ofPresident Kennedy, we will allprosper if we ask not only what theForum can do for us but also whatwe can do for the Forum. If we joinin maintaining the Forum as thenation’s most active and thought-ful meeting place for educationand innovations in constructionlaw, we will be able to look back on ourservice with the same satisfactionvoiced by President Reagan whenhe retired from public life: “notbad…not bad at all.”

1 If you do not retain your past issues of The Construction Lawyer, you canaccess them via Westlaw.

Associate Editor’sMessageElizabeth J. Anderson

I am honored to hold the posi-tion of Associate Editor. We will continually strive to informyou of upcoming events, pub-lications and other Forumactivities, and alert you of any recent developments inconstruction law. Please do nothesitate to contact me if youhave something that youbelieve should be published in Under Construction.

Page 4: ABA Under Construction New 2004-08

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Contractors Criminally Liable?(continued from page 1)

because he did not intend to violatethe building code. The MinnesotaCourt of Appeals rejected this argu-ment, finding that the statute was apublic welfare statute and thatviolation of the building code was astrict liability offense, which meantthat proof of mens rea was notrequired in order to convict Arkell.Arkell also argued that, even if thestatute did not require proof ofmens rea, he could not personallybe criminally liable because he hadno control over the subcontractorthat actually violated the code. TheCourt rejected this argument,applying the responsible corporateofficer doctrine. Under thatdoctrine, a corporate officer can befound guilty for the crime of anemployee or subcontractor whenthey are in a position to preventthe crime. It does not matterwhether the corporate officer knewthat the crime was being committed or whether the corporate officerpersonally participated in the crime.The theory behind the doctrine isthat corporate officers will paycloser attention to their company’sactivities if they are personally atrisk for violations of the law.

Ultimately, the Minnesota SupremeCourt overturned Arkell’s convic-tion. The court held that thestatute in question was not apublic welfare statute that allowedfor strict liability. The Court based its decision on the fact that strictliability statutes are generallydisfavored and that legislativeintent to impose strict liabilitymust be clear before a court cando away with the mens rearequirement. In reaching itsconclusion, the Court took intoaccount the fact that the building

code is often ambiguous, with

varying interpretations by the

code officials who regulate

projects during construction. The

court did not decide whether the

responsible corporate officerdoctrine applied.

Arkell appears to be the first

reported case dealing with the

issue of criminal strict liability for

building code violations. At least

one other court, however, has

stated in dicta that violations

of building codes are the type of

public welfare statutes that are

appropriate to be classified as

strict liability crimes. See State v.Young, 965 P.2d 37, 45 fn. 7 (Ariz.

Ct. App. 1998). Similarly, in State v.Edelman, 780 A.2d 980 (Conn.

App. Ct. 2001), a conviction was

affirmed for violating the building

code without a showing of culpable

intent, although the defendant in

Edelman did not challenge whether

mens rea was a requirement for

conviction.

The odds of facing criminal

charges for building code viola-

tions are remote, especially if

the contractor is responsive to

requests from code officials that

deficient work be corrected.

However, contractors should be

aware that violations of the build-

ing code could potentially subject

them to criminal liability, even

if the violation was caused by a

subcontractor. Further, under the

responsible corporate officer

doctrine, officers and owners of

contractors could conceivably find

themselves the target of criminal

charges based on their subcon-

tractor’s building code violations.

ASSOCIATE EDITOR’S NOTE

The Supreme Court of Virginia upheld the criminal convictionunder a construction fraud statute in Holsapple v.Commonwealth, 587 S.E.2d 561 (Va. 2003). The defendant was

the manager and agent of a construction company that entered into a contract to build a home. Defendant had previously been convictedof construction fraud and sentenced to fifteen years in prison with allbut fifteen months suspended. The home was built, but it was deemeduninhabitable due to faulty construction. The defendant also over-charged the home owner. Relying on Virginia statutory law, the courtnoted that the “relevant question is whether a builder or contractorobtained an advance based upon future work promised with a fraudu-lent intent not to perform or to perform only partially[.]” The courtheld that the defendant acted with gross negligence and “a specificintent to keep the advance of money and not complete the work[,]”sentencing him to 20 years in prison. See also, United States v. MYRGroup, Inc., 361 F3d 364 (7th Cir 2004) (multi-employer doctrine doesnot extend OSHA criminal liability to a company that allegedly improp-erly trained employees of another employer, as the trainer was not anemployer at the worksite).

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If money is due under thesubcontract at the time thesubcontractor files for bank-

ruptcy, a bankruptcy trustee maydemand that the general contrac-tor pay the money directly to thetrustee, and not by joint check tothe unpaid supplier, irrespective of any joint check agreement. How well a joint check agreementstands up to these challenges willdepend, in large part, upon howwell the agreement was drafted.

Joint Check Payments asAvoidable Preferences:

Under the Bankruptcy Code, certainpayments made to (or for the bene-fit of) a debtor-subcontractor’screditors may subsequently berecovered by the bankruptcy trusteeas an avoidable “preference.” Inorder for such a payment to be a“preference,” several conditionsmust be satisfied. Among thoseconditions is the requirement thatthe debtor-subcontractor must havehad an “interest” in the money paid.

Bankruptcy trustees frequentlyallege that joint check paymentsreceived by the debtor-subcontrac-tor’s suppliers before bankruptcy areavoidable preferences and, there-fore, due to be returned by thosesuppliers to the bankruptcy trustee.In these cases, the critical issueoften is whether the debtor-subcon-tractor had any “interest” in theproceeds of the joint checks. The bankruptcytrustee will argue that, because thesubcontractor was a joint payee onthe joint check, the subcontractorhad the requisite “interest” in thecheck proceeds. Suppliers andgeneral contractors, on the otherhand, will argue that that alone is notsufficient to give the subcontractoran “interest” in the funds.

The terms of the joint check agreement itself generally aredeterminative. If the agreementclearly states that subcontractorserves merely as a trustee or a“mere conduit” of the joint checkpayment, bankruptcy courts oftenfind that the subcontractor doesnot have the necessary “interest” inthe joint check proceeds so as tomake it an avoidable preference.See, e.g., In re Unicom, 13 F.3d 321(9th Cir. 1994); In re GoldenTriangle Capital, Inc., 171 B.R. 79, 81-82 (9th Cir. BAP 1994). The parties’conduct also is relevant. Bankruptcycourts have found that a joint checkpayment is not preferential wherethe material supplier acted inreliance upon the joint check agree-ment in supplying the debtor withmaterials. See, e.g., Mid-AtlanticSupply v. Three Rivers AluminumCompany, 790 F.2d 1121, 1125-27(4th Cir. 1986).

Joint Check Payments Unpaidwhen the Bankruptcy is Filed.

If a general contractor owes apayment under a subcontract atthe time the subcontractor files for bankruptcy, the subcontrac-tor’s bankruptcy trustee likely willmake demand upon the generalcontractor to pay the moneydirectly to the subcontractor’sbankruptcy estate, regardless ofwhether a joint check agreement isin place or not. Again, the criticalissues will be whether the debtor-subcontractor has the requisiteinterest in the joint check andwhether the general contractor hasthe contractual right to makepayment directly, or by joint check,to the unpaid suppliers.

Practice Pointers:

• Write Joint Checks Only forAmount due Supplier. Joint

checks generally should be writtenonly for the amount actuallyowing to the supplier. To theextent that any additional moniesare owing to a subcontractorunder the subcontract, the generalcontractor should write a separatecheck for the balance. Otherwise,if the joint check includes thepayment of any money that will beretained by the subcontractor, thesubcontractor has a much betterargument that it has the requisite“interest” in the joint check.

• Make Suppliers Party to JointCheck Agreement. The generalcontractor may want to insist thatthe subcontractor’s suppliers bemade parties to the joint checkagreement, and include languagein the agreement stating expresslythat the supplier is relying uponthe joint check arrangement inagreeing to supply goods andservices to the subcontractor.

• Define Subcontractor’s Duties.The joint check agreement shouldimpose an affirmative duty uponthe subcontractor to endorse thejoint check to the supplier uponreceipt, grant the general contrac-tor the power of attorney toendorse the check on the subcon-tractor’s behalf if the subcontractordoes not endorse the check, andprohibit the subcontractor fromunilaterally revoking the jointcheck agreement.

• Subcontractor Serving asTrustee. The joint check agree-ment should provide that thesubcontractor acknowledges that, to the extent it receives apayment by joint check, it shallhold in trust all funds due to thesuppliers and serves merely as aconduit for the payment due tothe suppliers.

JOINT CHECK AGREEMENTSBy Edward Peterson

Charlie Monroe
Not available on-line
Charlie Monroe
Not available on-line
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AGC Publishes Amendments to Address MaterialPrice Volatility in Fixed-Price ContractsBy Mark McCallum

Ken Simonson, Chief

Economist, Associated

General Contractors of

America, has characterized 2004

as “the year of living dangerously

for construction contractors.”

Quite simply, in 2004, the price,

supply and delivery of many

construction materials are project

factors that few, if any, contractors

can forecast with any degree of

comfort and certainty. Because of

various market factors, such as a

weakened U.S. dollar and consump-

tion

of materials by robust, growing

economies in China, India and other

countries, volatility in material

price and supply is the order of the

day and, likely, the foreseeable

future. Essential materials for

construction that are experiencing

sudden price instability include

steel and steel products, copper,

aluminum, cement, petroleum and

natural gas, wood products, and

gypsum. Such volatility in prices

places significant and, in some

instances, calamitous financial

burdens on contractors working

under fixed-price agreements.

Unexpected price spikes

for construction materials may

obliterate the already thin margins

of contractors, rendering some

projects infeasible and even endan-

gering contractors’ abilities to be

viable, on-going businesses.

As a general rule, the risks of mate-

rial price increases in fixed-price

agreements are borne by the

contractor. Since this period of

rapidly changing material prices

was unexpected, many construc-

tion contracts executed prior to

2004 do not include provisions

that would afford a basis for relief

in circumstances where the

contractor experiences impacts

from sharp material price

increases. In the absence of such

provisions, a contractor may not

have effective legal recourse. Legal

arguments

to excuse the contractor’s perfor-

mance due to price increases

generally have met with little

success; courts have been rarely

swayed by contractor arguments

asserting force majeure, commer-

cial impracticability or mutual

mistake to excuse performance.

Recognizing that the price of

steel and steel products likely will

remain unstable “for some time to

come,” the Board of Directors of

the Associated General

Contractors of America (AGC)

adopted a Resolution on March 12,

2004 that, among other things,

called for public and private

owners to include “equitable

adjustments” for material price

increases in fixed-price contracts.

AGC continues

to urge that public and private

owners consider including

economic price adjustment clauses

in construction contracts as a fair

means to allocate the risk of

unpredictable material price fluctu-

ations that are beyond the control

of either party and to avoid the

inclusion of speculative contin-

gencies in the contract price.

Use of such clauses are recognized

and authorized in the public

sector. For example, the Federal

Acquisition Regulation (FAR)

permits the inclusion of economic

price adjustment clauses in fixed-

price contracts in situations when

“there is serious doubt concerning

the stability of market or labor

conditions that will exist during

an extended period of contract

performance” (FAR § 16.203-2).

The determination to include these

clauses in fixed-price contracts

is left to the discretion of the

contracting officer. Under the FAR,

economic price adjustments fall

into three general types: adjust-

ments based on established prices;

adjustments based on actual costs

of labor or materials; and adjust-

ments based on cost indexes of

labor or material (FAR § 16.203-1).

The FAR contains examples of

standard clauses relating to adjust-

ments based on established prices

(see FAR § 52.216-2, Economic

Price Adjustment-Standard

Supplies, and FAR § 52-216-3,

Economic Price Adjustment-

Semistandard Supplies) and on

actual cost of labor or material

(see FAR § 52-216-4, Economic

Price Adjustment-Labor and

Material).

No standard clause for adjustments

based in cost indexes is prescribed

in the FAR. In addition to the

FAR clauses, the Defense Federal

Acquisition Regulation Supplement

(DFARS) includes standard clauses

to address adjustments for basic

steel, aluminum, brass, bronze or

copper mill products (DFARS §

252.216-7000) and nonstandard

steel items (DFARS § 252.216-

7001).

Although standard economic priceadjustment clauses have existed

(continued on page 7)

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in the public sector, the families ofstandardized industry forms (thosepublished by AIA, EJCDC, AGC,DBIA), which are used often in theprivate sector, have not includedsuch clauses. With that in mind andat the urging of the AGC Board ofDirectors to provide a modelclause for the industry, the AGCContract Documents Committeedeveloped on an expedited basis astandardized amendment to itsfixed-price owner-contractoragreement and general conditions,AGC Document No. 200, 2000Edition. Published in May as AGCDocument No. 200.1, AmendmentNo. 1, “Potentially Time and Price-Impacted Materials,” thisstandardized, three-pageAmendment responds to marketfluctuations, adjusting the priceand time for delivery of construc-tion materials that are listed in anattached schedule (“Schedule A”).

The Amendment is intended to becompleted and executed contempo-raneously with the constructioncontract. This is important to notesince compensation for any listedmaterial is not to be duplicated inany contingency amounts in theconstruction contract (AGC 200.1,Paragraph 2.1). With respect to eachmaterial subject to the Amendment,Amendment 200.1 requires theparties to agree upon a method forestablishing the “Baseline Price” of the material and a method forcalculating an adjustment to thatbaseline price. Because theAmendment is intended to be flexi-ble and to cover many differentkinds of construction materials,calculation methods are merelysuggested (established market orcatalog prices; actual materialcosts; material cost indices; or othermutually agreed upon method) andno single method is deemed to be the default method. At the top ofSchedule A are instructions that

caution the parties to describe eachmaterial with specificity, to select an objective standard for calculat-ing the baseline price, and, if amaterial price cost index approachis chosen, to select a cost index thatmost accurately reflects the listed material. These are importantcaveats to ensure the enforceabilityof the Amendment.

As do the FAR clauses,Amendment 200.1 allows forupward and downward adjustmentof the baseline price. Either partymay provide written notification tothe other regarding adjustments.Such notification is to be givenwithin 30 days of the date of theevents that justify the equitableadjustment along with “appropri-ate documentation substantiatingsuch adjustment (AGC 200.1,Article 3). Equitable adjustmentsare not retroactive—that is, priceadjustments are permitted for only

those materials delivered on orafter the date of the written notice seeking the adjustment.Adjustments may not include anyamount for overhead and profit,and the aggregate of all suchadjustments are subject to a maxi-mum percentage, as set by theparties, of the original contractprice (AGC 200.1, Paragraph 3.3).The Amendment also permits thecontractor, in situations where thecontractor is not at fault, toreceive a time extension and anequitable adjustment of thecontract price in the event that the project isdelayed due to the late delivery orunavailability of a listed material(AGC 200.1, Article 4).

Copies of AGC Document No. 200.1are available to be downloaded inPDF format from the AGC web site(www.agc.org/galleries/default-file/agc_200_amend.pdf).

Editor’s NoteFor a recent case excusing asteel erector from performingdue to improperly fabricatedmaterial, see Miller v. MillsConstruction, Inc., 352 F3d 1166(8th Cir. 2003). While theimpracticability analysis wasunnecessary to arrive at thisresult, as material breach by aparty generally justifies theother party’s failure to perform,the Eighth Circuit noted thatSouth Dakota recognized thedoctrine of commercial imprac-ticability, which providedanother basis for relief.

AGC Publishes Amendments(continued from page 6)

Friday, November 5, 2004

Baltimore • Charlotte• Los Angeles •Minneapolis • New York

UPCOMING REGIONALSEMINAR SERIES

Page 8: ABA Under Construction New 2004-08

UNDERCONSTRUCTION

Lawyers Servingthe Construction Industry through Education and Leadership

American Bar Association321 N. Clark StreetChicago, IL 60610

Non-Profit OrganizationU.S. Postage

PAIDAmerican Bar

Association

The newsletter of the ABA Forum on the

Construction Industry

August 2004

WHEN: October 21 – 22, 2004

WHERE: Tampa Marriott Waterside

TITLE: Construction Contracts: Forms and Substance – The Array of Essential ConstructionDocuments Beyond Design and Construction Agreements

TELL ME MORE: Join us in beautiful Tampa, Florida on October 21 and 22, 2004 for a day and a half

program devoted to the construction contracts and documents beyond design andconstruction agreements. The presentations will focus on pre-construction and pre-bidagreements, financial performance agreements, environmental, consultancy and pre-construction services agreements, site related agreements, payment relatedagreements, equipment procurement and operation agreements, dispute resolutionboard agreements and procedures, dispute related agreements, and a presentation onethics and avoiding conflicts when representing multiple parties.

OTHER UPCOMING PROGRAMS:

For more information and to register for this terrific program, please visitwww.abanet.org/forums/construction.

Join Us for Our Fall Meeting in Tampa, Florida

FUNDAMENTALS: LEARNINGTHE BASICS FROM THE PROSNovember 5, 2004 Charlotte, Baltimore, New York, Los Angeles and Minneapolis

MIDWINTER MEETINGJanuary 27, 2005Waldorf-Astoria in New York, NY

ANNUAL MEETINGApril 7-9, 2005Sheraton in New Orleans, LA