CHAPTER ONE: INTRODUCTION TO CONSTRUCTION LAW
1.1
Definitions
1.2
Construction Law and The UCC
1.2.2 The Predominant
Factor Test
1.2.3 UCC Vs. Construction Law
1.2.4 Sales and Construction: Basic
Differences
1.3
Sources of the Law: A Note for Non-Lawyers
1.4 A
Note On Obsolescence
CHAPTER TWO: LICENSING
1.1
ARCHITECTS
1.1.1 License Requirement – Individuals
1.1.2 Certificate of Authorization – Firms
1.1.3 Registration by Reciprocity
1.1.4 Solicitations and Proposals by
Out-of-State Firms
1.1.5 License Renewal – Continuing
Education
1.1.6 The Seal
1.1.7 Exemptions
1.1.8 Negotiation of Contracts for
Architectural Services
1.1.9 Code of Professional Ethics
(A) Conflict of Interest
(B) Full Disclosure
(C) Compliance with Laws
(D) Professional Conduct
(E) Competence
1.1.10 Violations
1.1.11 Architects & Engineers – Incidental
Practice
1.2
PROFESSIONAL ENGINEERS
1.2.1 License Requirement
1.2.2 Engineer in Training
1.2.3 Class A Professional Engineer
1.2.4 Class B Professional Engineer
1.2.5 License Renewal
1.2.6 Practice of Engineering as a Firm
1.2.7 Temporary Licenses
1.2.8 License by Comity
1.2.9 Branch Offices
1.2.10 Practice by Firms Located in Foreign
Countries
1.2.11 Official Seals
1.2.12 Exceptions to the
Licensing Requirement
1.2.13 Rules of
Professional Conduct
(A)
Responsibility to the public
(B) Competency
for Assignments
(C) Public
Statements
(D) Conflicts
of Interest
(E)
Solicitation of Work
(F) Improper
Conduct
1.2.14 Continuing Education
Requirements
1.3
LAND SURVEYORS
1.3.1 Eligibility Requirements
1.3.2 Seals
1.3.2 Exclusions
1.4
LANDSCAPE ARCHITECTS
1.4.1 Requirements
1.4.2 Reciprocity
1.4.3 Seal
1.4.4 Exemptions
1.4.5 Practice By Partnerships and
Corporations
1.4.6 Code of Ethics
1.5
CONTRACTORS
1.5.1 Definitions
1.5.1 License and Certificate
1.5.2 When a License is Required
1.5.3 Testing Requirements
1.5.4 Effect of Not Having A License When
Required
1.5.5 Grounds for Denying a License
1.5.6 Grounds for Discipline or Revocation
1.5.7 Qualifications:
Examination and Net Worth
1.5.8 Qualifying a Business
Entity for a Contractor’s License
1.5.9 Use of An Unlicensed
Subcontractor
1.5.10 License From Another
State
1.5.11 Joint Venture Bids
1.5.12 Acting as Prime
Contractor
1.5.13 License Needed to
Obtain a Building permit
1.5.14 Exemptions
1.5.15 Contractor
Classifications
(1) General
Contractors – Building
(2) General
Contractors – Highway
(a) “Bridges”
(b) “Concrete
Paving”
(c) “Asphalt
Paving’
(d) “Grading”
(e) “Highway
Incidental”
(3) General
Contractors – Public Utility
(a) “Pipe Lines”
(b) “Water and
Sewer Plants”
(c) “Water and
Sewer Lines”
(4) General
Contractors – Specialty
(a) “Boring and
Tunneling”
(b) “Concrete”
(c) “Interior
Renovation”
(d) “Marine”
(e) “Masonry”
(f)
“Pre-engineered Metal Buildings”
(g) “Railroad
Lines”
(h) “General
Roofing”
(i) “Specialty
Roofing”
(j) “Structural
Framing”
(k) “Structural
Shapes”
(l) “Swimming
Pools”
(m) “Wood Frame
Structures”
(n) “Public
Electrical Utility”
(o) “Boiler
installation”
(p) “Glass and
Glazing”
(5) Mechanical
Contractors
(a) “Air
Conditioning”
(b) “Heating”
(c) “Packaged
Equipment”
(d)
“Electrical”
(e) “Lighting
Protection Systems”
(f) “Plumbing”
(g) “Pressure
and Process Piping”
(h)
“Refrigeration”
1.5.16 The Contractor’s
Duty to Obtain a Building Permit
1.5.17 Work that Does Not
Require A commercial Contractor’s License
1.6 CONSTRUCTION MANAGERS
1.7 RESIDENTIAL HOME
BUILDERS
1.7.1 Licensing
Requirements for Residential Builders
1.7.2
Registration of specialty Contractors
1.7.3
Residential Construction Standards
1.8 Related Professions and
Occupations
1.8.1
Environmental System Operators
1.8.2 Home
Inspectors
1.8.3
Commercial Inspectors
1.8.4 Real
Estate Appraisers
1.8.5
Sanitarians
1.8.6 Soil
Classifiers
1.8.7 Geologists
1.8.8 Burglar and Fir Alarm
Systems
1.8.9 Blasting Contractors
1/9 Useful Addresses
CHAPTER THREE: BUILDING CODES, STANDARDS AND PERMITS
3.1
Purpose
3.2
Statutory Regulation of Construction Practices
3.3
Mandatory Codes (County and Municipal Government)
3.4
Exception for Farm Structures
3.5
Optional Adoption of Code Appendices
3.6
State Agencies
3.7
Building Code Enforcement Officers
3.8
Penalties for Violation of A Building Code
3.9
Exemption For State and School District Facilities
3.10
Building Energy Efficiency Standards Act
3.11
Enforcement and Appeals
3.12
Certificate of Occupancy
3.13
Variations and Appeals
3.14
Penalties
3.15
Modular Buildings Construction Act
3.16
State Projects
3.17
Residential Construction Standards
3.18
Building Permits
CHAPTER FOUR: STATE PROCUREMENT OF DESIGN AND
CONSTRUCTION CONTRACTS
3.1
INTRODUCTION: Private vs. Public Procurement
3.2
CONSTRUCTION CONTRACTING UNDER THE SOUTH CAROLINA
CONSOLIDATED PROCURMENT CODE (“CPC”)
3.2.1
Purpose of the Consolidated Procurement Code
3.2.2
Application
2.2.3
Office of the State Engineer (“OSE”)
2.3.4
Source Selection ad Contract Formation
3.2.5
Construction Contracts
3.2.5.1 The Invitation for Bids – Subcontractors –
Anti-Bid Shopping
3.2.5.2 Specification
3.2.5.3 Contract Clauses
3.2.5.4 Receipt and Safeguarding of Bids
3.2.5.5 Bid Criteria and Evaluation
3.2.5.6 Number of Bidders
3.2.5.7 Bid Opening
3.2.5.8 Rejection of Bids
3.2.5.9 Bid Acceptance – Notice of Intent to Award
3.2.5.10 When Bids Exceed Available Funds
3.2.5.11 Bid Bonds
3.2.5.12 Performance Bonds
3.1.5.13 Labor and Material Payment Bonds
3.2.5.12 Obtaining Copies of Bonds
3.2.5.15 Correction, Clarification or Withdrawal of
Bids
3.2.5.16 Prequalification
3.2.5.17 Contract Award
3.2.5.18 Cancellation of An Invitation For Bids
3.2.5.19 Waiver of Minor Informalities
3.2.5.20 Public Access to Procurement Information
3.2.5.21 Bid Protests Under the CPC
3.2.6
Competitive Best Value Bidding
3.2.7
Competitive Sealed Proposals – Design/Build Contracts
3.2.8
Negotiations After Unsuccessful Competitive Sealed
Bidding
3.2.9
Small Purchases
3.2.10
Sole Source Procurement
3.2.11
Emergency Procurement
3.2.13
Multiple-Prime Contractors
3.2.14
Construction Management Contracts
3.3
CONTRACT ADMINISTRATION
3.3.1
Obligation of Good Faith
3.3.2
Change Orders – General
3.3.3
Change Orders – Delay and Time Extensions
3.3.4
Change Orders – Cost and Pricing Data
3.3.5
Construction Change Directives
3.3.6
Retainage
3.3.7
Prompt Payment
3.3.8
Administrative Resolution of Contract and Breach of
Contract Controversies
3.3.9
Subcontractor Pass Through Claims and the Severin
Doctrine
3.3.10
Mediation and Review
3.3.11
Appeal to the Procurement Review Panel
3.3.12
Appeal From a Decision of the Procurement Review Panel
3.3.13
Debarment and Suspension
3.3.14
Drug-Free Workplace
3.4
STATE PROCUREMENT OF ARCHITET-ENGINEER, CONSTRUCTION
MANAGEMENT, AND LAND SURVEYING SERVICES
3.4.1
Definitions
3.4.2
Policy
3.4.3
Procurement
3.4.4
Errors and Omissions in A/E Work Products
3.4.5
Small A/E Contracts (Less than $25,000)
3.4.6
Architect/Engineer Protests and Claims
3.4.7
Performance of Other Work
3.5
Local Government & School District Procurement Codes
3.6
Indefinite Delivery Contracts
3.7
Assistance to Minority Businesses
3.8
South Carolina Department of Transportation (SCDOT)
3.8.1
Prequalification of Bidders
3.8.2
Contractor’s Certificate
3.8.3
Disqualification
3.8.4
Scope of Disqualification
3.8.5
Suspension
3.8.6
Procedure
3.8.7
Reinstatement
3.8.8
SCDOT Bid Protests
CHAPTER FIVE: THE ARCHITECT/ENGINEER
5.1
Introduction
5.2
The Owner-Architect/Engineer Agreement
5.2.1
Private Contracts
5.2.2
State Architect/Engineer Contracts
5.3
The Architect-Consultant Agreement
5.4
Architect/Engineer Liability
5.4.1
Liability to the Owner
5.4.1.1 Exceeding Project Cost Limitations or Estimates
5.5.1.2 Design Errors and Omissions – Standard of Care
and Requirement for Expert Testimony
5.5.1.3 Inadequate Inspection
5.5.1.4 Erroneous Certification of Payment
5.5.1.5 Erroneous Approval of Contractor’s Shop
drawings and Submittals
5.5.2
Liability to Contractor and Subcontractor
5.5.2.1 Implied Warranty of Plans and Specifications
5.5.2.2 Negligent Contract Administration/Inspection
5.5.3
Liability to Workers and Visitors
5.5.5
Liability to Users
5.5.6
Liability to the Surety
5.6
Professional Liability Insurance
CHAPTER SIX: THE OWNER
6.1
Introduction
6.2
Administrative Relief vs. Breach of Contract
6.3
Warranty of Plans and Specifications
6.4
Contract Interpretation
6.5
Duty not to delay, hinder or interfere with the
Contractor’s performance
6.6
Changes to the contract
6.7
Conclusion
CHAPTER SEVEN: THE CONTRACTOR
7.1
Introduction
7.2
The Construction Contract
7.2.1
Integration Clause
7.2.2
Site Visit/Site Investigation
7.2.3
Review of Contract Documents and Field Conditions by
Contractor
7.2.4
Order of Precedence
7.2.5
Permits and Fees/Compliance with laws and regulations
7.2.6
Owner’s Right to Carry out the Work
7.2.7
Contractor’s Construction Schedule
7.2.8
Shop Drawings, Product Data and Samples
7.2.9
Aesthetic Determination
7.2.10
Claims and Disputes
7.2.11
Changes in the Work
7.2.12
Differing Site Conditions
7.2.13
Time
7.2.14
Payment
7.1.14.1 Schedule of Values
7.1.14.2 Applications for Payment
7.1.14.3 Progress Payment/Failure of Payment
7.1.14.4 Substantial Completion/Punchlist
7.1.14.5 Final Completion and Final Payment
7.2
Claims Bar (Contractual Modifications of Statute of
Limitations/Repose/Notice)
7.2.1
Statutes of Limitations
7.2.2
Statute of Repose
7.2.3
Notice of Claim Provisions
7.3
Indemnification
7.3.1
Allocation of Liability On Other Than A Comparative
Fault Basis
7.3.2
Contractual Indemnity
7.3.3
Equitable Indemnity
7.3.4
Indemnification for Bodily Injury To, Or Property Damage
of, the Indemnitor’s Own Employees
7.3.5
Limitation of Liability
7.3.6
Liquidated Damages
7.3.7
No Damages For Delay
7.3.8
Pay-If-Paid
7.3.9
Pay-When-Paid
7.3.10
Waiver of Statutory Immunity From Liability for Claims
Bases on Site Safety
7.3.11
Waiver of Statutory Immunity From Liability for Damages
To Buried Utilities/Structures
7.3.12
Waiver of Statutory Immunity From Liability Under
Workers’ Compensation Laws
[1] Exempt Persons
[2] Liability of Third
Persons
7.4
Causes of Action
7.4.1
Breach of Contract
7.4.2
Standard of Care
7.4.3
Implied Warranties
[1] Implied warranty that
plans and specifications are sufficient “for the purpose
in view”
[2] Builder’s implied
warranty of workmanlike service
[3] Seller’s implied
warranty of fitness and habitability
7.4.4
Impossibility of Performance And Commercial
Impracticability
7.4.5
Third-Party Beneficiaries
7.4.6
Negligence
7.4.7
Immunity of Government Entities
7.4.7
Immunity of Government Contractors
7.4.8
Recovery of attorneys’ fees
7.4.9
Interest
7.5
Conclusion
CHAPTER EIGHT: THE SUBCONTRACTOR
8.1
Introduction
8.2
Bidding
8.3
Scope of work
8.4
Time
8.5
Payment
8.5.1
Pay-when-paid clauses
8.5.2
Prompt Payment Requirements
8.5.3
Statutory Penalties
8.6
Warranty of Plans and Specifications by Contractor
8.7
Contractor’s Duty not to Hinder, Delay or Interfere
8.8
No damage for delay clauses
8.9
Assignment of subcontract
8.10
Subcontractor Claims and Disputes
8.11
Subcontract Changes
8.12
Hold Harmless and Indemnity Clauses
8.13
Insurance
8.14
Subcontractors Liability to Contractor
8.15
Termination
8.16
Conclusion
CHAPTER NINE: CHANGES
9.1
Introduction
9.2
Written vs. Oral changes
9.3
The Federal Changes Clause: The background to all
changes clauses
9.4
AIA Article 7 and Other Form Changes Clauses
9.4.1
Agreed Changes
9.4.2
The Construction Change Directive (CCD)
9.4.3
Minor Changes
9.5
The OSE’s Version of AIA Article 7
9.5.1
Change Orders
9.5.2
Construction Change Directives
9.5.3
Minor Changes
9.6
Authority
9.7
Constructive Changes
9.8
Deductive Changes
9.9
Cardinal Changes and Abandonment
9.10
Notice
9.11
Cumulative Impact Changes
9.12
Conclusion
CHAPTER TEN: DIFFERING SITE CONDITIONS
10.1 Introduction
10.2
Common Law
10.2.1
The Federal Background
10.2.2
South Carolina
10.3
Changes Condition/Differing Site Condition Clauses
10.3.1
The Federal Clause
10.3.2
The AIA A201-1997, Article 4.3.4 and other form
clauses
10.3.3
The OSE’s differing site condition clause
10.4 Type I Differing Site Condition Claims
10.5 Type II Differing Site Condition Claims
10.6 Conclusion
CHAPTER ELEVEN: DAMAGES AND DELAY
11.1
Introduction
11.2 Owner’s Damages
11.2.1
Defective Construction
11.2.2 Incomplete or Late Performance
11.2.3
Liquidated Damages
11.2.4
Consequential Damages
11.3 Contractor’s Damages
11.3.1 Late Payment
11.3.2 Termination for Convenience
11.3.3. Wrongful Termination for Default
11.3.4
Delay
11.3.4.1 Calculating the Delay
11.3.4.2 Direct Costs
11.3.4.3 Indirect/Overhead Costs
11.3.4.4 Unabsorbed Home office Overhead Costs
11.3.4.5 No damage for delay clauses
11.3.4.6 Interest
11.3.4.7 Attorneys’ Fees
11.4
Mitigation of Damages
11.5 Punitive Damages
11.6
Causation
11.7 Conclusion
CHAPTER TWELVE: BONDS
12.1
Introduction
12.2
Bonds and Insurance: Differences and Similarities
12.3
Required Bonds (Miller Act and Little Miller Act)
12.4
Payment Bonds
12.4.1
Federal
12.4.2
South Carolina
12.4.3
Commercial
12.5
Performance Bonds
12.5.1
Federal
12.5.2
South Carolina
12.5.3
Commercial
12.6 Surety Defenses to a Bond Claim
CHAPTER THIRTEEN: MECHANICS LIENS
13.1
Introduction
13.2
The Contractor
13.3
The Subcontractor, Material Supplier & Laborer
13.4
Attorney’s Fees Under § 29-5-10 (b) and § 29-5-20 (c)
13.5
The Owner’s Right of Protection
13.5.1
Notice of Non-Responsibility (§ 29-5-30)
13.5.2
Bonding off the Lien (§ 29-5-90)
13.6
The Lender (§ 29-5-90)
13.7
Use of Contract Language to Modify or Terminate Lien
Rights
13.8
Conclusion
CHAPTER FIFTEEN: INSURANCE
15.1
Introduction
15.2
Professional Liability Policies and Issues
15.3
Builder’s Risk (first party property) Policies and
Issues
15.4
Commercial General Liability (Third-Party Liability)
Policies and Issues
CHAPTER SIXTEEN: LITIGATION/ARBITRATION/MEDIATION/ADR
16.1
Introduction
16.2
The South Carolina Arbitration Act
16.3
Mediation and ADR in South Carolina
16.4
Conclusion
CHAPTER SEVENTEEN: STATUTES OF LIMITATION AND REPOSE
16.1
Introduction: It’s not over until it’s over
16.2
Statutes of Limitation
16.2.1
Application of the Discovery Rule
16.2.2. Tolling the Statute
16.2.3
Modification by Agreement
16.2.4
Estoppel
16.3
Claims on State Projects
16.4
The South Carolina Statute of Repose and it’s many
exceptions (§ 15-3-640)
16.5
Conclusion
