Date: Jun 30, 2016
Construction Contracts – Pay Close Attention to the Details
The Minnesota Court of Appeals recently issued an order which provides contractors with a harsh reminder that all entities in the construction industry must pay attention to and follow all contractual requirements in their agreements. In Contractors Edge, Inc. v. City of Mankato, the Minnesota Court of Appeals heard a case involving a construction agreement for a road extension project. The agreement was between the City and Contractors Edge (“Contractor”). A payment dispute arose over the location where the Contractor was required to stock pile and store excavated materials. The agreement specified that a stock pile must be one-half mile away from the project. The Contractor soon realized that the driving distance from the project site to the designated stock pile location was more than a half mile, thereby increasing the Contractor’s hauling costs. The Contractor requested a Change Order to cover the increased hauling costs. The City rejected the request, arguing that the straight line distance between the project and the stock pile location was actually less than one-half mile. The agreement was ambiguous in that it did not specify whether the distance referred to “driving” or “straight line” distance. Read the newsletter.
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