HOMEWORK HELP...Contract Law/Construction Management

Discussion in 'The Howard Stern Show' started by TeeDonkey, Oct 3, 2015.

  1. TeeDonkey

    TeeDonkey Well-Known Member VIP

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    Anyone familiar with contracts as relating to construction management? I have a couple questions to answer based on the case provided.

    CASE:

    The project bid documents called for the installation of colored concrete in an existing building. Because of the specific design requirements regarding the quality and durability of the color, the design specified that a dye manufactured by "PERFECT COLOR" or an equal to "PERFECT COLOR" shall be used.

    The concrete subcontractor (Angry Bird Inc [ABI]) had been in the business for 35 years, but had always used a dye manufactured by "PERFECT COLOR PLUS". ABI had submitted to the General Contractor (Elephant Inc [EI]) a bid to use "PERFECT COLOR PLUS". The question then became, who was responsible to pay for the more expensive "PERFECT COLOR" product?

    BACKGROUND:

    The process of offer an acceptance had not gone smoothly. Elephant Inc (general contractor) sent to Angry Birds Inc (concrete sub) their standard subcontract with a request for ABI to sign and return. ABI signed and returned the subcontract with two amendments: 1) a note regarding scheduled start and completion. 2) a clarification on the number of meetings they were required to attend during construction. Angry Birds Inc (concrete sub) intended to attach their substitution for "PERFECT COLOR PLUS" but failed to do so. ABI returned the signed agreement to EI and later asked EI to attach their substitution for "PERFECT COLOR PLUS" to the subcontract. EI signed the subcontract and returned it to ABI without attaching the ABI substitution for "PERFECT COLOR PLUS". Nevertheless, ABI started sending submittals to EI as required by the subcontract.

    QUESTION TO ANSWER:
    Does a contract exist? If so, when? If not, why?

    Is there consideration (a benefit and detriment to offerer and offeree)? Explain why or why not. Apply the consideration formula discussed in class.

    Is the "mirror image rule" applicable? If so, when?
    the mirror image rule, also referred to as an unequivocal and absolute acceptance requirement states that an offer must be accepted exactly with no modifications. The offeror is the master of one's own offer. An attempt to accept the offer on different terms instead creates a counter-offer, and this constitutes a rejection of the original offer.

    If there was acceptance by ABI (concrete sub) what caused acceptance?

    What evidence, if allowed by the court, may help ABI contractors to win their case?



    Stern related because we all know that cock sucker breached every contract he signed!

    Oh boy, lets see how this goes....fingers crossed.
     
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  2. sstressed

    sstressed enhancement toker VIP

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    i'm an ex contract specialist who did nothing but construction IFBs and and A/E RFPs for a few years. i'm high and in the middle of game time though so i'll have to get back to you. :leaf:
     
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  3. Bristol Chicken

    Bristol Chicken Free Range and Loving It Gold

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    Rules for contracting:

    1. If you don't trust the other party with a handshake you must have a rock solid contract.
    2. Do not trust anybody.
     
  4. TeeDonkey

    TeeDonkey Well-Known Member VIP

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    :cwl:

    Thanks buddy, any help would be appreciated! Enjoy man!
     
  5. RONNIE THE CLAW

    RONNIE THE CLAW Well-Known Member VIP

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    :haha:
     
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  6. Beth143nacho

    Beth143nacho Well-Known Member VIP

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    If you're the person that contracted the construction manager, you don't have any contract with the subcontractor. You have given the cm the specification for the concrete and they agreed to provide it.

    unless the construction manager requested a change in specification (e.g. "My sub can only get product x, product y is unavailable. Is product x ok?") and you approved it, any contract or implied contract between the construction manager and the subcontractor is their business, not yours. If the concrete company did (or even if they didn't) get approval from the construction manager, they never got approval from you.

    The only thing you need to look out for is "or equal". Typically, we write our contracts to include verbiage that the owner must approve all substitute products, whenever "or equal" is mentioned. If the concrete company can prove that the product they provided was equal or superior to the specified product, there is no breach between the contractor and the construction manager, therefore, there is no breach of the contract between the cm and you.

    How is "perfect color plus" not equal or superior to "perfect color"?
     
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  7. Chibbs

    Chibbs Well-Known Member

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    Technically a contract exists and ABI is fucked.

    Nothing should move forward until acceptance of a material change has been made.
    Not construction material. Material Change is a term of art.
    The submitted substitution was not attached.
    That should have told ABI everything right then and there.

    The failures of ABI could actually constitute 'Fraud in the Inducement'.
     
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  8. TeeDonkey

    TeeDonkey Well-Known Member VIP

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    Who would you think is responsible for upgrading the concrete to Perfect Color?

    ABI failed to include their substitution when signing the contract, BUT ABI later asked EI (the general contractor) to included the substitution. EI then signs the contract without acknowledgement of the substitution.

    Sounds to me like ABI's office screwed up, and they would have to pay, IDK?
     
  9. TeeDonkey

    TeeDonkey Well-Known Member VIP

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    Hmmm, gonna have to google "fraud in the inducement"....thanks for the help
     
  10. TeeDonkey

    TeeDonkey Well-Known Member VIP

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    Hmmm, I follow what your saying. The way the homework sheet is written, I guess it could be misleading. Apparently "perfect color plus" may NOT be superior to "perfect color"....I was not given any specs between the 2.

    The homework is also misleading about what the contracts say.....do all submittals have to be approved by the owner....or does the GC have power to approve submittals.

    But it still doesn't change the fact that ABI didn't include the substitution when signing the agreement.

    BTW, i must spread more reps damn!
     
  11. R.P. McMurphy

    R.P. McMurphy Well-Known Member

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    ...sounds like the owner might get a credit if color plus was cheaper and its not uncommon for sensible people to come together and sign a change order to rectify hicups in a construction contract.
     
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  12. Chibbs

    Chibbs Well-Known Member

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    EI signed and sent back the contract as it stood.
    The fact that ABI didn't contest the lack of the substitution constitutes their acceptance of the contract sent back by EI.

    Their negligence in allowing the substitution to be discarded carries the liability.

    A good lawyer could make the case that this was deliberate in an attempt to provide something other than the contract specifies.
    A deliberate attempt to obfuscate by ABI could easily be claimed as fraud in the inducement as they never had the intention to honor the contract.
     
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  13. SomerSky

    SomerSky Obsessed with what I hate Banned User

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    From the $900 an hour lawyer:
    The answer is the subcontractor eats it...
    To the extent it costs more, the onus is on them...


    Your welcome...
     
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  14. Beth143nacho

    Beth143nacho Well-Known Member VIP

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    The owner doesn't have a contract with the subcontractor. If the suncontractor did request a substitution, and the gc approved it without the permission of the owner, the gc will be at fault because the sub can just point to the substitution agreement between the gc and sub. Either way, unless the gc presented the owner with a substitution request and the owner approved it, the owner is not liable and can request damages from the gc.

    Then it comes down to whether or not the sub got the gc approval for substitution. If they did, then the gc is at fault. If not, the sub is.

    if the sub did not attach the substitution to their contract with the gc, the sub is liable as the substitution request was never approved.
     
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