California Appeals Court Provides Guidance on ‘Pay-When-Paid’ Provisions in Construction Subcontracts

 

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Ted R. Gropman

Cindy J. Lee

On April 17, the California Court of Appeal decided Crosno Construction, Inc. v. Travelers Casualty & Surety Company of America,1 effectively narrowing the scope of enforceable “pay-when-paid” provisions in construction subcontracts to the extent the subcontractor seeks recovery against a general contractor’s payment bond surety. Although the Crosno case involved a public works project, the rationale and holding should apply with equal force to private works projects. Basing the bulk of its decision on the Wm. R. Clarke Corp. v. Safeco Insurance Co.2 case, the court found that an open-ended “pay-when-paid” provision in a subcontract is not enforceable against a subcontractor that seeks to recover on a public works payment bond claim. This article discusses the Crosno decision and the implications for contractors on both sides of the contract moving forward. Continue reading “California Appeals Court Provides Guidance on ‘Pay-When-Paid’ Provisions in Construction Subcontracts”

ADR for Construction Disputes During COVID-19: How to Manage Dispute Resolution Before and After the Dust Settles

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Albert Bates Jr.
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R. Zachary Torres-Fowler

Days after the World Health Organization declared the COVID-19 outbreak a global pandemic, governments from around the world scrambled to enact measures aimed at mitigating the spread of the virus. In the United States, cities and states have enacted travel restrictions, issued shelter-in-place orders, and directed nonessential businesses to shutter. While all aimed at mitigating the spread of the virus, these measures will have an immense disruptive impact on businesses and industries around the world — the construction sector included. Continue reading “ADR for Construction Disputes During COVID-19: How to Manage Dispute Resolution Before and After the Dust Settles”

Pennsylvania Governor Paves Way to Reopen Construction on May 1

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Jamey B. Collidge

On April 20, Pennsylvania Gov. Tom Wolf amended his March 19, 2020 Order Regarding the Closure of All Businesses That Are Not Life Sustaining. Under the previous order, construction was permitted to continue only if the business qualified as “life-sustaining” and was performing emergency repairs or if the business obtained a waiver. Continue reading “Pennsylvania Governor Paves Way to Reopen Construction on May 1”