For many years the prevalence of the “Type 1” indemnity clause has been the subject of fierce debate within the construction industry. Subcontractors have complained that they are saddled with indemnity obligations that require them to indemnify contractors from construction-related claims for which these subcontractors are truly not responsible. In defense, contractors have argued that they must be entitled to the freedom to set contractual terms to best protect themselves and they point out that subcontractors are certainly free to negotiate better terms or turn down work.
Important Changes to California Construction Forms Beginning on July 1, 2012: The Impact of 2010 Senate Bill 189
The most important changes to California construction law in decades will become effective on July 1, 2012. Signed into law in 2010, Senate Bill 189, reorganized and renumbered all those California Civil Code provisions dealing with such familiar construction claim remedies as the Mechanics Lien, Stop Notice and Bond Claim. While this effort greatly simplified the legal rules and made them easier to follow, there are a number of important substantive changes to these laws. These changes include new definitions, new rules and new procedures found in new Civil Code Sections 8000 to 9566. These changes also mean that new forms will be necessary. As a result of these changes, all those in the construction industry should begin using the new forms and procedures beginning on July 1, 2012. Failure to do so could result in loss of important legal rights. Some of the most important changes to the forms are outlined below. A website to access the new forms free of charge is also identified below.
Another costly new regulation is heading our Industry’s way early next year. The Sacramento Air Quality District (AQMD) has recently released a proposal that would force every construction project (Over 2,000 sq ft Commercial) to reduce their total project baseline carbon emissions by 20% Nitrate Oxide (NOx) and by 45% Particulate Matter (PM 10). Submittals of full equipment lists, project durations, and the size of the job-site are all necessary for the Air Board’s “scientific determination” of whether a project has met its carbon emission targets. If companies do not meet the stringent new guidelines, they will be required to pay a fee ranging from a minimum of $16,400 to a maximum of $38,960 per ton of (NOx). Particulate matter will also be charged via Cap & Trade, but this fee has not yet been released to the public.
Owners and Contractors are Liable for Injuries Caused by their Independent Contractors under the “Peculiar Risk Doctrine”
Many contractors and owners believe that if they hire an independent contractor to perform work and that independent contractor causes injury to others during the performance of that work, then it is the independent contractor alone who will be liable for those injuries. In most circumstances, this is correct. The owner or the contractor will not be held liable for injuries caused by his or her independent contractor. However, this is not always the case.
Have you ever wondered whether those attorney fee clauses your attorney insists you include in your contracts really work? Or are they just words to be discarded when it comes time for a judge to make a decision in your lawsuit? Here is a true short story to show that those clauses really do work. The names have been changed to protect the innocent and avoid continuing to embarrass the guilty.
Those contractors who from time to time contract with Indian tribes* might take notice of a case from the United States Supreme Court. In 1998 the U.S. Supreme Court issued a decision in Kiowa Tribe of Oklahoma v. Manufacturing Technologies, Inc. 523 U.S. 751 (1998). The facts are as follows: Manufacturing Technologies, Inc., entered into a stock purchase contract with the Kiowa Tribe. The transaction was secured by a promissory note. The tribe defaulted on the note and Manufacturing Technologies sued in Court for breach of contract.
We have all encountered it at one point or another – the boiler plate contract from the out of state general contractor or property owner that would require the California Contractor to resolve disputes, whether by mediation, arbitration, or litigation outside the state even where the work was performed in California. If you are now thinking of signing such an agreement, or have signed such an agreement and have a dispute brewing, do not be bullied into agreeing to an out of state forum or resolving the dispute out of state.
Why Applied Legal?
Applied Legal instruction is created and presented by a team of licensed attorneys with more than 25 years of California construction law experience. Learn the foundation of Mechanics Liens, Preliminary Notices, Payment Bond Claims and other valuable tools that will help you protect yourself and your business.
What You Don’t Know CAN Hurt You
Getting paid on time or not at all could come down to how and when you filled out the correct form. Applied Legal explains the law and puts the power of knowledge on your side.