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A performance bond ensures that the bonded contractor or subcontractor will complete its work on a project. If a bonded contractor or subcontractor defaults, the surety should step in and exercise one of its options under the bond, which typically includes arranging for the completion of the defaulted contractor’s work.

Often, before a surety’s obligation to complete the defaulted contractor’s work is triggered, the surety must be given written notice of the contractor’s default. This gives the surety the chance to choose one of its options under the bond.

If an owner or contractor fails to provide any required written notice before hiring a replacement contractor or subcontractor to complete the work, the surety may assert the lack of written notice as a defense to a performance bond claim.

But what happens when an owner or contractor fails to timely provide the required written notice of default and the surety, once it learns of the default, indicates that the owner or contractor’s decision to hire a replacement contractor or subcontractor is fine?

In that situation, it’s possible that the surety may have waived its right to timely written notice. A recent federal court case—VEC, Inc. v. Joyce Electrical, Inc.—recently addressed such a situation.Continue Reading Can a Surety Waive Its Right to Notice Under a Performance Bond?

I write a fair amount about construction claims, and I frequently emphasize the importance of properly proving damages in connection with construction claims (e.g., a general contractor only being awarded $22,000 on its $1.3 million claim against a subcontractor, in part, because the general contractor failed to adequately prove its damages).

Under Florida law, the burden is on the party seeking damages to prove its damages with a reasonable degree of certainty. While difficulty proving your damages may not be a bar to recovery, the award of damages cannot be based on mere speculation or guesswork.

A recent federal court trial illustrates the difficulty contractors and subcontractors can have proving claims against each other for breach of a construction contract.Continue Reading The Burden of Proof for Construction Damages

The coronavirus (COVID-19) is gaining speed and construction projects across the country and in Florida have reportedly been slowing or shut down as a result. It’s time for construction contractors, including those working on government projects, to consider whether they will be entitled to additional money and/or time on their projects. In this post, we will take a brief look at how things might shake out on federal government and Florida Department of Transportation (“FDOT”) projects.
Continue Reading Coronavirus and Government Construction Projects: Do Contractors Get More Money and Time?