By: Donald Berry
Partner John Greenhall commented for Construction Executive’s “Executive Insights” for the June edition of the magazine, which also includes this year’s ranking of the Top 50 Construction Law Firms. John discussed what firms can learn from the COVID-19 pandemic in terms of risk management, and the kinds of policies and procedures companies should have in place.
While there are many lessons to be learned from the pandemic, from the perspective of risk management, contractors must be prepared to survive in the “new normal.” First, it is critical that a contractor understand the legal implications of its contract beyond bricks and mortar. For example, I have heard the term “force majeure” more now than ever. It is extremely important for a contractor’s personnel to know some of the basics of contract language, as well as their implications, in order to safeguard the company.
The obvious followup from this first point is that most contracts require notice to be sent relating to requests for time extensions or extra costs. Even though the contractor thinks that everyone knows the project was suspended or that PPE costs were not anticipated, without sending notice, the contractor is putting itself in a difficult position where it is arguing constructive notice rather than just holding up a written notice.
Finally, a key lesson is to remember: do not sign something without considering its effect. I have been surprised by the number of releases I have seen since construction re-started in which the owner or higher tier contractor sought to have our clients increase their indemnity obligations due to injury from COVID-19 or waive their rights to time extensions, PPE extras or inefficiency costs. The releases have been hidden in change orders, addenda, lien waivers and the like. Contractors need to be extremely careful now and in the future.
