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Construction Law Primer October 9, 2003

Construction Law Primer October 9, 2003. The Definitive Good Bargain. Tom gave up the brush with reluctance in his face, but alacrity in his heart. And while the late steamer Big Missouri worked and sweated in the sun, the retired artist sat on a barrel

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Construction Law Primer October 9, 2003

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  1. Construction Law Primer October 9, 2003

  2. The Definitive Good Bargain Tom gave up the brush with reluctance in his face, but alacrity in his heart. And while the late steamer Big Missouri worked and sweated in the sun, the retired artist sat on a barrel in the shade close by, dangled his legs munched his apple, and planned the slaughter of more innocents. There was no lack of material; boys happened along every little while; they came to jeer, but remained to whitewash. By the time Ben was fagged out, Tom had traded the next chance to Billy Fisher for a kite in good repair; and when he played out, Johnny Miller bought in for a dead rat and a string to sing it with - and so on, hour after hour. And when the middle of the afternoon came, from being a poor poverty-stricken boy in the morning, Tom was literally rolling wealth.

  3. Q: Contracts, Courts & Lawyers Who Needs Them?

  4. A: You Do! • To record mutual promises • To enforce mutual promises • To predict outcomes

  5. Q: Does the law: • enforce promises? • predict outcomes?

  6. “If the law supposes that”, said Mr. Bumble, “the law is an ass - an idiot.” Oliver Twist

  7. What is Justice? “A commodity which in more or less adulterated condition the state sells to the citizen as a reward for his allegiance, taxes and personal service. ” Ambrose Bierce, The Devil’s Dictionary

  8. Q: What is Lawful? A: “Compatible with the will of a judge having jurisdiction” Ambrose Bierce, The Devil’s Dictionary

  9. Q:What is a Lawyer? A: “One skilled in circumventing the law.” Ambrose Bierce, The Devil’s Dictionary

  10. Conclusion? “Those people in the construction industry who look for certainty within the four corners of the contract, without focusing on the factual complexities of the construction process . . . often have been sources of, rather than solutions to, problems.” Max Greenberg, Speech to engineers, 1954

  11. Q: Good Contracting? • Convergence of values, through tender or negotiation; • Achieve certainty of scope, price and time; • Raise reasonable expectations of performance on both sides; • Flexibility in on both sides in satisfying those expectations.

  12. Q: Bad Contracting? • Divergence of values through over-reaching on both sides; • Dissociating risks and rewards from the power to control them; • Leaving “Wiggle room”: i.e. intentional lack of certainty over scope, price, time; • Unreasonable expectations; constant renegotiation, inevitable litigation.

  13. Q: How Bad Can It Get?

  14. A: All the lawyers and consultants win; all the players lose!

  15. Litigation Economic 101 – Slide 1 $500,000 Claim Net Gain   $ Ø -500K (Claim) Net Loss Total Value Consumed: $500,000

  16. Litigation Economic 101 – Slide 26-12 Months From Day # 1 A dozen or so letters; two case management conferences; some production; some discoveries Net Gain   $ Ø -150K Legal costs Net Loss -650K (- 500K claim -150K accrued costs) Total Value Consumed: $800,000

  17. Litigation Economic 101 – Slide 3 12-18 Months From Day # 1 - $250,000 settlement More discoveries; more motions; a successful mediation Net Gain   $ Ø -500K (-250K legal costs, -250K to settle) -500K (-500K claim -250K legal costs +250K settlement) Net Loss Total Value Consumed: $1,000,000

  18. Litigation Economic 101 – Slide 4 18-24 Months From Day # 1 - $500,000 Judgment Net Gain   $ Ø -500K claim -500K legal costs +500 judgment Principal + interest + costs -500K legal costs -500K judgment Net Loss Total Value Consumed: $1,500,000

  19. Q: How Bad Can It Get? A: It can cost $1.5 million to make $500,000 change hands!

  20. A. Different Paths to a Contract “All sensible people are selfish, and nature is tugging at every contract to make the terms of it fair.” Ralph Waldo Emerson, 1860

  21. B. Contracts in General – The Essential Elements “Necessity never made a good bargain.” Benjamin Franklin

  22. C. Self-Preservation:How to Read a Contract to Survive What is a Lawyer? “One skilled in circumventing the law.” Ambrose Bierce, The Devil’s Dictionary

  23. How it Feels to be a Lawyer Daumier, Don Quixote

  24. How it Feels to be a Legal Researcher Daumier, Don Quixote & Sancho Panza

  25. D. The Unwritten Contract “A verbal contract isn’t worth the paper it’s written on.” Samuel Goldwyn

  26. The End Daumier, The Solicitor

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