GEORGIA  CONSTRUCTION  LAW

 

TABLE OF CONTENTS................................................................i

PREFACE......................................................................................... x

ACKNOWLEDGEMENTS..........................................................xiii

ABOUT THE AUTHORS............................................................ xv

CHAPTER ONE  LICENSING.................................................. 1

I.          INTRODUCTION.................................................................... 1

II.        RESIDENT CONTRACTORS................................................ 3

A.    What is a resident contractor?...................................................... 3

B.    Public Works................................................................................ 4

1.     THE STATE OF GEORGIA................................................ …...4

2.     GEORGIA DEPARTMENT OF TRANSPORTATION..............6

3.     GEORGIA STATE FINANCING AND INVESTMENT COMMISSION (GSFIC)…………………………………………………….7

4.     CITY OF ATLANTA.................................................................. 7

C.    RESIDENTIAL AND GENERAL CONTRACTORS................ 8

1.     Licensing Requirements for Residential-Basic and Residential-Light Commercial Contractors……………………………………9

III.       SUBCONTRACTORS.............................................................15

1.     Electrical Contractors...................................................................16

B.    Master and Journeyman Plumbers................................................17

1.     Decisions..................................................................................... 18

C.    Conditioned Air Contractors........................................................ 19

D.    Low Voltage Contractors............................................................. 20

E.     Utility Contractors....................................................................... 21

IV.       EXEMPTIONS....................................................................... 22

A.    Trade Specialty/ Limited Service Specialty Contractors............ 22

1.     Classroom Trailers...................................................................... 23

2.     Environmental Remediation........................................................23

3.     Sitework.............................................................................. 24

4.     Outdoor Environment (pools)............................................. 24

5.     Streetscapes......................................................................... 25

6.     Concrete Work.................................................................... 25

7.     Masonry............................................................................... 26

8.     Rough Carpentry................................................................. 26

9.     Finish Carpentry.................................................................. 27

10.       Remediation.................................................................... 27

11.       Siding and Cornice Work................................................ 27

12.       EIFS and Stucco............................................................. 28

13.       Re-Roofing of Existing Structures.................................. 28

14.       Drywall, Insulation, Studs & Acoustical........................ 28

15.       Pre-manufactured Metal and Fabric Canopies................ 29

16.       Refrigeration (not free standing)..................................... 29

17.       Greenhouses.................................................................... 29

18.       Pre-engineered Metal Building....................................... 30

19.       Industrial Specialty Work............................................... 30

20.       Boilers............................................................................. 31

21.       Cooling Tower................................................................. 31

22.       Turf, Track and Field...................................................... 31

23.       Tennis Court.................................................................... 32

24.       Parks and Recreation....................................................... 32

25.       Cell Towers..................................................................... 33

26.       Sewage Pump Station..................................................... 33

27.       Landfills.......................................................................... 34

28.       Dams & Reservoirs.......................................................... 34

29.       Industrial Process Equipment and Piping....................... 34

V.        RECIPROCITY...............................................................35

VI.       NONRESIDENT CONTRACTORS...............................35

A.    Nonresident Contractor Act.................................................35

CHAPTER TWO  BIDDING..............................................37

I.          INTRODUCTION...........................................................37

II.        PUBLIC PROJECTS........................................................37

A.    A. Types of Delivery Systems............................................. 37

1.     Design-Bid-Build................................................................ 37

2.     Construction Manager/General Contractor......................... 38

3.     Design-Build....................................................................... 38

B.    Competitive Bidding and Bid Solicitation Issues.................39

C.    Procurement Laws.................................................................39

1.     Public Works Contracts by State Departments, Boards, Bureaus, Commissions, Offices, or Agencies – Department of Administrative Services (O.C.G.A. §§ 50-5-67 to 50-5-72)…………………………………..40

2.     The Bidding Process........................................................... 42

3.     Public Works Contracts by the State Board of Education (O.C.G.A. §§ 20-2-520)…………………………………………………  45

4.     Public Works Contracts by Counties, Municipal Corporations and Other Government Entities…………………………………45

5.     Public Works Contracts by the Georgia Department of Transportation (GDOT) (O.C.G.A. §§ 32-2-60 to 32-2-74)............................................................................... 53

6.     Bidding Law for Public Works Contracts by the State Road and Tollway Authority (O.C.G.A. § 32-10-68)....................................................................................... 60

7.     Bidding Law for Public Works Contracts for County Road Systems (O.C.G.A. §§ 32-4-60 to 32-4-74)........................................................................................60

8.     Public Works Contracts for Municipal Road Systems (O.C.G.A. §§ 32-4-110 to 32-4-123)…………………………………………………63

III.       PRIVATE PROJECTS........................................................... 66

IV.       WITHDRAWAL, MODIFICATION, RELEASE, AND EXPIRATION OF BIDS…………………………………………………………67

A.    Withdrawal of Bids......................................................................67

1.     Generally......................................................................................67

2.     Before Formal Acceptance..........................................................68

3.     Consideration of Other Bids After Withdrawal/Resubmitting Bids…..69

4.     Modification of Bids...................................................................70

B.    Expiration of Bids.......................................................................70

1.     Competitive Sealed Bids............................................................70

2.     Competitive Sealed Proposals....................................................71

C.    Bid Bonds (Generally)................................................................71

D.    Equitable Rescission...................................................................71

1.     Bids on Private Projects..............................................................71

2. Equitable Rescission is Unavailable as a Remedy for Bids on Public Projects…..………………………………………………….72

V.        BID PROTESTS....................................................................72

A.    Administrative Remedies...........................................................73

B.    Right to Reject Bids...................................................................74

C.    Standing to Bring a Protest........................................................74

1.     Low Bidders..............................................................................74

2.     Rejected Proposer..................................................................... 74

3.     Taxpayer Standing.....................................................................75

D.    Available Due Process............................................................. 75

1.     Hearing for Prospective Bidders...............................................75

2.     Available Relief.........................................................................75

CHAPTER THREE   ARCHITECT AND ENGINEER......77

I.          INTRODUCTION.................................................................. 77

II.        STATE REGULATION OF ARCHITECTS AND ENGINEERS…78

A.    Architects.....................................................................................78

1.     Architect Licensure Requirements..............................................78

B.    Engineers.....................................................................................82

1.     Engineer Licensure Requirements..............................................82

III.       POTENTIAL LIABILITY FOR DESIGN PROFESSIONALS                              ……………………………………………………………………..84

A.    Sources of Liability................................................................. 85

1.     Breach of Contract.............................................................. 85

2.     Performance Deficiencies Which Lead to Claims............... 86

3.     Negligent Design................................................................. 87

4.     Negligent Supervision......................................................... 89

5.     Liability to third parties for duties created by law or accepted industry standard            92

B.    Standard of Care Affidavits................................................... 93

1.     Requirements....................................................................... 93

2.     Purpose................................................................................ 93

3.     Application.......................................................................... 94

4.     Failure to Follow Statute..................................................... 94

IV.       CONTRACTUAL LIMITATIONS OF LIABILITY.......94

CHAPTER FOUR   CONTRACTS.....................................97

I.          INTRODUCTION.............................................................97

II.        INTERPRETING CONTRACTS...................................... 98

III.       IMPORTANT CONTRACT CLAUSES...........................100

A.    Payment Clauses................................................................... 100

B.    Indemnification Clauses........................................................ 104

C.    Termination Clauses.............................................................. 106

1.     Termination for Convenience.................................................106

2.     Termination for Cause............................................................107

D.    Force Majeure........................................................................ 108

E.     Warranty of Plans and Specifications................................... 110

1.     The Spearin Doctrine..............................................................111

2.     The Builder’s Warranty..........................................................112

3.     Express Warranties.................................................................115

4.     Disclaimers............................................................................ 116

F.     Provisions Relating to the Timing of Performance............... 116

G.    No Damages for Delay.......................................................... 118

H.    Flowdown Provisions............................................................ 119

I.      Waiver of Jury Trial............................................................... 120

IV.  BREACH OF CONTRACT ACTIONS................................. 121

A.    Substantial Performance........................................................ 122

B.    Attorneys' Fees...................................................................... 122

CHAPTER FIVE  CHANGE ORDERS AND EXTRA WORK..... 124

I.          INTRODUCTION................................................................ 124

II.        WHAT IS EXTRA WORK?................................................ 124

III.       CARDINAL CHANGE....................................................... 127

IV.       DEDUCTIVE CHANGE ORDERS.................................... 128

V.        RECOVERY IN QUANTUM MERUIT............................. 129

VI.       NOTICE AND PROCEDURE REQUIREMENTS............ 134

A.    Does the notice provision apply?.......................................... 135

B.    Was notice sufficient?........................................................... 136

C.    Is there actual notice?............................................................ 136

D.    Did the owner waive the notice or written change order requirement?.....137

E.     Can an oral change order be enforced?................................. 138

CHAPTER SIX  DIFFERING SITE CONDITIONS.......140

I.          SHIFTING OF RISK........................................................... 140

II.        DIFFERING SITE CONDITIONS CLAIMS TYPES....... 141

III.       DEFENSES.......................................................................... 142

A.    Exculpatory Clauses.............................................................. 142

B.    Notice Requirements............................................................. 143

IV.       CHANGED CONDITIONS ABSENT CONTRACT CLAUSES   143

CHAPTER SEVEN  DELAY AND DISRUPTION............147

I.          INTRODUCTION................................................................ 147

II.        DELAY................................................................................. 148

A.    Time is of the Essence........................................................... 148

B.    Inexcusable, Excusable, and Compensable Delay................ 149

C.    Notice Requirements Associated with Project Delay........... 152

D.    Concurrent Delay.................................................................. 154

E.     No Damages for Delay.......................................................... 154

F.     Delay Damages..................................................................... 156

1.     Liquidated Damages......................................................... 156

2.     Delay Damages Available to the Contractor..................... 157

G.    Incorporation by Reference................................................... 158

H.    Liquidating Agreements........................................................ 159

I.      Acceleration and Constructive Acceleration......................... 160

III.       DISRUPTION...................................................................... 161

CHAPTER EIGHT  LIMITATIONS OF ACTIONS..........165

I.          STATUTES OF LIMITATION............................................ 165

A.    Contract Actions................................................................... 165

B.    Tort Actions.......................................................................... 167

1.     Actions for Injuries to Persons.......................................... 167

2.     Actions for Damage to Real Property............................... 168

II.        STATUTE OF REPOSE....................................................... 169

CHAPTER NINE  BONDS........................................................171

I.          INTRODUCTION................................................................ 171

II.        PAYMENT BONDS............................................................ 172

A.    Statute Of Limitations.......................................................... 176

B.    Remedies............................................................................... 176

III.       PERFORMANCE BONDS................................................. 177

A.    Remedies............................................................................... 178

CHAPTER TEN  LIENS...........................................................181

I.          HISTORY AND PURPOSE................................................ 181

II.        ENTITLEMENT TO LIEN RIGHTS.................................. 182

A.    Property/Property Interests Subject To Liens....................... 184

III.       BURDEN OF PROOF/STANDARD OF REVIEW........... 185

IV.       BURDEN TO BRING SUIT/PRIVITY.............................. 185

V.        BURDEN OF PROOF/USE OF MATERIALS.................. 185

VI.       BURDEN – PAYMENT DISPUTE.................................... 186

VII.     PROPERTY INTERESTS SUBJECT TO LIENS............... 186

VIII.    STATUTORY REQUIREMENTS...................................... 187

A.    Notice of Commencement.................................................... 187

B.    Notice to Contractor............................................................. 188

C.    Preliminary Notice of Lien.................................................... 189

IX.       PERFECTING A CLAIM OF LIEN................................... 189

X.        GEORGIA’S NEWLY REVISED LIEN STATUTE......... 190

XI.       CONCLUSION.................................................................... 192

CHAPTER ELEVEN  LITIGATION AND ALTERNATIVE                     DISPUTE RESOLUTION ………………………………….. 193

I.          INTRODUCTION................................................................ 193

II.        MEDIATION....................................................................... 194

III.       GEORGIA ARBITRATION CODE................................... 196

A.    General Statutory Provision.................................................. 196

B.    The Scope of Arbitration....................................................... 196

1.     Specific Issues Reserved for Arbitration.......................... 196

2.     Gateway/Threshold Issues for Arbitrating........................ 197

3.     Enforcing an Arbitration Provision................................... 199

4.     Discovery.......................................................................... 202

5.     The Hearing....................................................................... 203

6.     Determination of an Award.............................................. 204

7.     Change of an Award by the Arbitrators........................... 205

8.     Court’s Confirmation of an Arbitration Award and Entry of Judgment   206

9.     Court’s Vacatur of an Arbitration Award......................... 207

10.  A Court’s Modification of an Arbitration Award............. 210

IV.       FEDERAL ARBITRATION ACT...................................... 211

A.    General Statutory Provision.................................................. 211

B.    Gateway/Threshold Issues.................................................... 211

1.     Arbitrability Involving Parties to a Contract..................... 211

2.     Arbitrability Involving Nonsignatories to a Contract....... 213

3.     Waiver of Right to Arbitrate............................................. 214

C.    The Scope of an Arbitration Agreement............................... 214

1.     Transactions Involving Commerce.................................... 214

D.    Enforceability of an Arbitration Provision............................ 215

1.     Based on the Agreement................................................... 215

2.     Restrictions on Enforceability........................................... 215

E.     Enforcing an Arbitration Provision....................................... 216

1.     Application for Enforcement............................................ 216

2.     Stay of Pending Litigation................................................ 217

F.     Arbitration Procedure............................................................ 217

1.     Choosing an Arbitrator...................................................... 217

2.     The Hearing....................................................................... 217

G.    A Court’s Confirmation of an Arbitration Award and Entry of Judgment   217

H.    A Court’s Vacatur of an Arbitration Award......................... 218

1.     Notice of Motion to Vacate an Award............................. 218

2.     Cannot Serve as a Collateral Attack on a Motion to Confirm an Award   219

3.     Grounds for Vacating an Award...................................... 219

4.     Rehearing upon a Vacated Award.................................... 220

5.     Appealing a District Court’s Vacatur Decision................. 220

I.      A Court’s Modification/Correction of an Arbitration Award 221

J.      Appeals of District Court Arbitration Decisions................... 222

1.    Order to Compel Arbitration is a Final Order Subject to Appeal    222

2.     Stay of Litigation Pending Appeal................................... 223

3.     Standard of Review for Order to Compel Arbitration..... 223

V.        VERTICAL CHOICE OF LAW /PREEMPTION.............. 223

A.    General Principle................................................................... 223

B.    Enforceability of an Arbitration Provision............................ 223

C.    Choice of Law Provision....................................................... 224

D.    Confirming an Award........................................................... 224

E.     Vacating an Award............................................................... 225

F.     Insurance Claims................................................................... 225

VI.       LITIGATION....................................................................... 225

A.    As the Result of No Valid Agreement to Arbitrate.............. 225

B.    As the Result of an Exception to the Georgia Arbitration Code ......             225

C.    Insurance............................................................................... 226

D.    Residential Real Estate......................................................... 226

1.     Initialing Requirement........................................................... 226

2.     Inapplicable to “Home Building Agreements”...................... 226

E.     Personal Injury Tort Claims................................................... 226

TABLE OF LAWS AND RULES.........................................227

TABLE OF CASES.................................................................. 237

INDEX..........................................................................................252