Kansas Court Strictly Construes Written Notification of Differing Site Conditions Clause

Razorback ContractorsInc. v. Board of County Commissioners
227 P.3d 29 2010 Kan. App. LEXIS 35 (Kan. Ct. App. April 2, 2010)

The Court of Appeals of Kansas recently upheld a trial court’s decision to strictly enforce a written notification of differing site conditions provision in a construction contract.

The matter before the Court of Appeals involved construction of a sanitary sewer line in Southern Johnson County, Kansas. Defendant the Johnson County Board of County Commissioners contracted Plaintiff Razorback Contractors of Kansas, Inc., the successful bidder on the Project, to provide construction services in connection with the Project.

The contract between the parties contained a provision requiring written notification of differing site conditions. That provision required Razorback to provide the project engineer written notice of its claim for extra compensation due to differing site conditions within 30 days after the start of the event giving rise to the claim. The notice provision further required Razorback to provide the project engineer with the amount of the claim along with supporting data within 60 days after the start of the event giving rise to the claim.

According to Razorback, it first reported that it had encountered unanticipated water conditions, during a September 2004 progress meeting. Razorback alleged that it continued to report unanticipated conditions on several later occasions, including at December 2004 and January 2005 progress meetings, in a letter dated February 2005, and in a June 2005 formal written request to increase the contract price based upon differing conditions.

On July 5, 2005, Johnson County Wastewater denied Razorback’s June 2005 formal written request to increase the contract price, stating that Razorback failed to provide the required written notice of differing conditions within the time specified in the contract. As a result, Razorback sued the Board for breach of contract. When the Board moved for summary judgment, the trial court granted that motion, finding that Razorback failed to comply with the notice requirements of the contract. Razorback then appealed that decision.

The Court of Appeals upheld the ruling, stating that the Board was entitled to notice in accordance with the provisions of the contract that the parties freely and voluntarily entered into. According to the court, Razorback failed to comply with those provisions. It did not provide formal written notice of the changed conditions or of its intent to seek additional compensation, until June 2005, approximately 9 months after the wet conditions were first encountered. In support of its holding, the Court of Appeals citied to other states (New York, Connecticut, Indiana, Washington, Wyoming, Iowa, and Ohio), all of which, applying their own state contract laws, have strictly construed similar written notice provisions.

In reaching its decision, the Court of Appeals addressed several arguments raised by Razorback. First, it determined that federal common law did not apply because no federal interest existed to justify applying it to this state court proceeding. Second, it found that substantial performance does not alleviate a party’s obligation to comply with formal notice requirements because parties are free to contract for any type of notice that they desire. Finally, the Court of Appeals determined that the Board did not waive its right to timely notice of a claim for additional compensation by extending Razorback’s performance time.

Click here to view full text of decision courtesy of LexisNexis.

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