Melissa Dewey Brumback | Construction Law in North Carolina
Last week we discussed an Owner terminating a Contractor “for cause”. Today, it’s time for a 180: what is your role as the architect when the Contractor is quitting?
First, be aware that there are valid reasons for a contractor to quit within the contract itself. Most of these have to do with either (a) time delays/stand stills or (b) failure of the Owner to make payments as required.
Never thought being a designer required Referee skills, did you?
The Contractor can suspend or terminate a contract with the Owner for cause, provided a 7 day written notice is given to Owner and Architect. See A201§14.1.3. (This can be an email notice as all AIA notice clauses now allow).
If this happens, what do you do? First, consult with the Owner to see if there is truth in the Contractor’s assertions. See if payment can be caught up, or any disputed money put into an escrow, or other options that will keep the Contractor working. Ultimately, if the project comes to a stand-still, money will be lost. Where money is lost, parties are sued. Keep the project moving to lower your own risks of being sued.
If there is no way to salvage the situation, make sure to fully document the Project status at the time the contractor quits work. Photographs, videos, a line in the file as to how much money had been earned and paid by the termination date. All will be key evidence in the inevitable law suit.
While the contractor’s decision to quit is out of your hands (you don’t have to certify anything), documenting the state of the Project can only help all parties later on.
When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes – please call Advise & Consult, Inc. at 888.684.8305, or email experts@adviseandconsult.net.