ALABAMA
CONSTRUCTION LAW
TABLE OF CONTENTS
CHAPTER ONE: INTRODUCTION TO CONSTRUCTION LAW
1.1 DEFINITIONS
1.2 SOURCES OF LAW
1.2.1 Federal Procurement Law
1.2.2 Alabama Statutes and Regulations
1.2.3 Sales Law
1.2.4 Common Law
CHAPTER TWO: PROJECT DELIVERY SYSTEMS
2.1 CONVENTIONAL - DESIGN/BID/BUILD
2.2 DESIGN-BUILD
2.2.1 Legality of Design-Build
2.2.2 Obstacles to Design-Build
2.2.3 Forms of Design-Build
2.3 CONSTRUCTION MANAGEMENT
2.3.1 Agency CM
2.3.2 CM At Risk
2.4 SOURCES OF CONTRACT DOCUMENTS
CHAPTER THREE: PUBLIC CONSTRUCTION
3.1 INTRODUCTION
3.2 FEDERAL GOVERNMENT CONTRACTING
3.3 STATE AND LOCAL CONTRACTING
3.3.1 Competitive Bidding
3.3.1.1 Bid Solicitation and
Pre qualification
3.3.1.2 Bid Selection
3.3.1.3 Bid Bonds
3.3.2 Enforceability of Bids
3.3.2.1 Contractor Bids
3.3.2.2 Bid Errors
3.3.2.3 Subcontractor and
Supplier Quotations
3.3.3 Post-Award Relief
3.4 BID PROTESTS
3.5 CONTRACT AWARD
3.6 PERFORMANCE OF PUBLIC WORKS CONTRACTS
3.6.1 Contract Documents
3.6.2 Payment Issues
3.6.3 Change Orders
3.6.4 Disputes
CHAPTER FOUR: BUILDING CODES, STANDARDS AND PERMITS
4.1 INTRODUCTION
4.2 PURPOSE OF REGULATION OF CONSTRUCTION
PRACTICE
4.3 MANDATORY CODES
4.3.1 State
4.3.2 Local Authorities.
4.4 BUILDING PERMITS
4.4.1 Building Inspection
4.4.2 Certificates of Occupancy
4.5 PENALTIES FOR VIOLATIONS
CHAPTER FIVE: THE ARCHITECT/ENGINEER
5.1 INTRODUCTION
5.2 STATE LAWS GOVERNING THE PRACTICE OF
ARCHITECTURE & ENGINEERING
5.2.1 Statutory Regulation of Architects
5.2.2 Statutory Regulation of Engineers
5.2.3 Associations of Architects and/or
Engineers
5.3 OWNER-ARCHITECT/ENGINEER AGREEMENT
5.3.1 Types of Agreements
5.3.2 Limitation on Services
5.3.3 Additional Services
5.4 ARCHITECT-CONSULTANT AGREEMENTS
5.5 THE ARCHITECT/ENGINEER’S RESPONSIBILITIES
5.5.1 Design
5.5.2 Bidding and Negotiation
5.5.3 Construction Administration
5.5.3.1 “Inspection”
5.5.3.2 Review of
Applications for Payment
5.5.3.3 Review and Approval
of Contractor Submittals
5.5.3.4 Authority to Order
Changes
5.5.3.5 The Architect as
Judge
5.5.4 Post-Construction
5.6 THE ARCHITECT/ENGINEER’S LIABILITY7
5.6.1 Liability to the Owner
5.6.2 Liability to the Contractor1
5.6.2.1 Inadequate Plans and
Specifications
5.6.2.2 Negligent
Construction Administration
5.6.3 Liability to Subcontractors
5.6.4 Liability to Other Third Parties
5.7 PROFESSIONAL LIABILITY INSURANCE
CHAPTER SIX: THE OWNER
6.1 INTRODUCTION
6.2 OWNER’S TYPICAL CONTRACT OBLIGATIONS
6.2.1 Duty of Payment
6.2.2 Duties of Cooperation and
Disclosure
6.3 OWNER’S IMPLIED OBLIGATIONS
6.3.1 Warranty of Plans and
Specifications
6.3.2 Duty Not to Delay, Hinder or
Interfere With the Contractor’s Performance
6.4 OWNER’S MATERIAL CHANGE IN THE CONTRACT
6.5 DISCLAIMER OR WAIVER OF OWNER’S OBLIGATIONS
CHAPTER SEVEN: THE CONTRACTOR
7.1 INTRODUCTION
7.2 QUALIFYING TO PERFORM CONSTRUCTION
SERVICES
7.2.1 General Contractor Licensing
7.2.2 Foreign Corporation Qualification
7.2.3 Exemptions
7.2.4 Penalties for Noncompliance
7.3 PREFERENCE FOR RESIDENT CONTRACTORS AND
LABOR
7.4 BIDDING OR NEGOTIATIONS
7.5 STANDARD FORM CONTRACTS
7.6 THE TYPICAL CONSTRUCTION CONTRACT
7.6.1 Integration Clause
7.6.2 Site Visit
7.6.3 Order of Precedence Clause.
7.6.4 Permits and Fees
7.6.5 Design Delegation7
7.6.6 Review of Contract Documents and
Field Conditions by Contractor
7.6.7 Compliance with Codes and
Ordinances
7.6.8 Contractor's Construction Schedule
7.6.9 Shop Drawings, Product Data and
Samples0
7.6.10 Aesthetic Determination
7.6.11 Claims and Disputes
7.6.12 Differing Site Conditions
7.6.13 Changes in the Work
7.6.14 Time
7.6.15 Payment
7.6.15.1 Schedule of Values
7.6.15.2 Progress Payments
7.6.15.3 Retainage
7.6.15.4 Substantial
Completion and Punchlists
7.6.15.5 Final Payment
7.6.16 Insurance
7.6.16.1 Property Insurance
7.6.16.2 Liability Insurance
7.6.16.3 Loss of Use Insurance
7.6.17 Statute of Limitations
7.6.18 Termination7
7.6.18.1 Termination by
Contractor
7.6.18.2 Termination by Owner
7.6.18.3 Contractor’s
Warranty
7.6.19 Attorneys’ Fees and Interest
7.7 RISK SHIFTING CLAUSES
7.7.1 Indemnification
7.7.2 Waiver of Subrogation
7.7.3 Additional Insured Coverage
7.8 CONSTRUCTION DEFECTS CLAIMS
CHAPTER EIGHT: THE SUBCONTRACTOR
8.1 INTRODUCTION
8.2 QUALIFYING TO PERFORM AS A SUBCONTRACTOR
8.2.1 Subcontractor Licensing
8.2.2 Nonresident Corporation
Qualification
8.3 BIDDING OR NEGOTIATIONS
8.4 TYPICAL SUBCONTRACT PROVISIONS
8.4.1 Scope of Work
8.4.2 Time
8.4.3 Payment
8.4.4 Contractor's Warranty of Plans and
Specifications
8.4.5 Contractor's Duty Not to Hinder,
Delay or Interfere
8.4.6 Assignment of Subcontract
8.4.7 Arbitration
8.4.8 Subcontractor Claims and Disputes
8.4.9 Subcontract Changes
8.4.10 Indemnity Clauses.
8.4.11 Insurance
8.4.12 Subcontractor's Liability to
Contractor
8.4.13 Termination
8.4.14 Attorney’s Fees and Interest
8.5 FLOW DOWN OF CONTRACT CLAUSES
CHAPTER NINE: CHANGES IN THE WORK
9.1 INTRODUCTION
9.2 CHANGES – FORMAL OR CONSTRUCTIVE
9.3 FORMAL CHANGES – HOW DO THEY WORK?
9.3.1 The Federal Changes Clause
9.3.2 Agreed Changes
9.3.3 Construction Change Directive or
Interim Directed Change
9.3.4 Minor Changes
9.3.5 Pricing of Changes
9.4 WHO HAS AUTHORITY TO ORDER A CHANGE?
9.5 ORAL DIRECTIVES
9.6 CONSTRUCTIVE CHANGE
9.7 NOTICE OF CONSTRUCTIVE CHANGE
9.8 CARDINAL CHANGE
9.9 DEDUCTIVE CHANGES
CHAPTER TEN: SITE CONDITIONS
10.1 INTRODUCTION
10.2 A CONTRACTOR’S RIGHT TO RELY ON THE OWNER’S
REPRESENTATION OF CONDITIONS
10.2.1 Duty to Investigate Site
10.2.2 Duty to Disclose
10.2.3 Disclaimers
10.3 NOTICE
10.4 CONTRACTUAL REMEDIES
10.4.1 Type I Conditions
10.4.2 Type II Conditions
10.4.3 Hazardous Materials
10.5 SITE CONDITIONS NOT COVERED BY THE “DIFFERING
SITE CONDITIONS” CLAUSE
10.6 COMPENSATION
CHAPTER ELEVEN: DAMAGES AND DELAYS
11.1 INTRODUCTION
11.2 DELAY AND ITS CONSEQUENCES
11.2.1 Classification of Delays
11.2.1.1 Excusable Delay
11.2.1.2 Compensable Delay
11.2.1.3 Inexcusable Delay
11.2.1.4 Concurrent Delay
11.2.1.5 Critical Delay
11.2.2 Consequences of Delay
11.3 CONTRACTUAL DELAY AND SCHEDULING
PROVISIONS
11.4 REMEDIES FOR DELAYS
11.4.1 Owner Remedies
11.4.2 Contractor Remedies
11.5 PROOF AND RECOVERY OF DAMAGES FOR DELAY
11.5.1 Methods of measuring and Proving Delays
11.5.2 Types of Delay Damages
11.5.2.1 Classification of Damages
11.5.2.2 Contractors’ Delay Damages
11.5.2.3 Owners’ Delay Damages
11.5.2.4 Pricing and Proof of Damages
11.6 OTHER DAMAGES
11.6.1 Owners’ Damages for Contractors’
Defective or Incomplete Performance
11.6.1.1 Types of Damages
11.6.1.2 Measure of Damages
11.6.2 Contractors’ Damages
11.6.2.1 Types of Damages
11.6.2.2 Late Payment Damages
11.6.2.3 Termination Damages
11.7 ATTORNEYS’ FEES
11.8 PREJUDGMENT INTEREST
11.9 PUNITIVE DAMAGES
11.10 EXCLUSIONS OR LIMITATIONS OF DAMAGES
11.10.1 “No Damages for Delay” Clauses
11.10.2 Monetary Limitations
11.10.3 Waivers of Consequential and Other
Damages
11.10.4 Duty to Mitigate Damages
CHAPTER TWELVE: BONDS
12.1 INTRODUCTION
12.2 CONTRACTOR BONDS
12.2.1 Federal Projects – The Miller Act
12.2.2 State Public Works – The “Little
Miller Act”
12.2.3 Performance Bonds
12.2.4 Payment, or Labor and Materials,
Bonds
12.2.5 Private Bonds
12.3 PAYMENT BOND CLAIM PRACTICE
12.3.1 Coverage of Bonds
12.3.2 Notice Requirements
12.3.3 Action on Bond
12.3.3.1 Federal Contracts
12.3.3.2 State Public Works
Contracts
12.3.3.3 Private Contracts
12.4 PERFORMANCE BOND PRACTICE
12.4.1 Contract Termination
12.4.2 Notice Requirements
12.4.3 Action on Bond
12.5 BAD FAITH
CHAPTER THIRTEEN: LIENS
13.1 INTRODUCTION
13.2 ENTITLEMENT TO LIEN
13.3 TYPES OF LIENS
13.3.1 Full-Price Lien
13.3.2 Unpaid Balance Lien
13.4 PRIORITY OF LIENS
13.5 WAIVERS OF LIENS
13.6 ENFORCEMENT OF LIENS
13.6.1 Notice to Owner
13.6.2 Verified Statement
13.6.3 Suit to Foreclose
13.6.3.1 Parties
13.6.3.2 Venue
13.6.3.3 Limitation of Actions
13.7 WRONGFUL FILING
CHAPTER FOURTEEN: EFFECTIVE COLLECTION TECHNIQUES
14.1 INTRODUCTION
14.2 ADVANCE PROTECTION OF RIGHTS
14.3 DUE DILIGENCE DURING CONSTRUCTION
14.4 REMEDIES IN EVENT OF IMPASSE
14.4.1 Suspension of Work
14.4.2 Termination of Performance
14.5 BANKRUPTCY
14.6 COLLECTION ACTIONS
CHAPTER FIFTEEN: DISPUTE RESOLUTION
15.1 INTRODUCTION
15.2 LITIGATION
15.2.1 Statutes of Limitations and Repose
15.2.2 Pleadings
15.2.3 Discovery
15.2.4 Trial
15.2.5 Appeals
15.3 ARBITRATION
15.3.1 The Arbitration Agreement
15.3.2 Enforceability in Alabama
15.3.3 Methods of Arbitration
15.3.4 Effect of Arbitration On Ongoing
Project and On Other Remedies
15.4 OTHER ALTERNATIVE DISPUTES RESOLUTION METHODS
15.4.1 Mediation
15.4.2 Mini-Trials and Non-Binding
Arbitration
15.5 CONSIDERATIONS IN SELECTING REMEDY
