| Contract Modification Versus a Cardinal Change |
| Contract modifications and cardinal changes are separated by degree. In the construction industry, contract modifications are quite common and basically consist of minor or slight changes to the parties' existing agreement within the scope of such agreement. A cardinal change is so severe as to be beyond the scope of the existing agreement such that an entirely new contract, with all the attendant formalities, is required.More... |
| Third-Party Claims Against Retainage Funds |
| Retainage funds do not only serve as a protective mechanism for an owner on a construction project. Third parties may also benefit from the funds that have been earned by the contractor, but withheld pending completion of the construction project. Third parties may seek to satisfy a contractor's outstanding indebtedness out of the retainage funds.More... |
| The Construction Industry and the Employment of Illegal Aliens |
| The Immigration Reform and Control Act of 1986 (IRCA), which amends the Immigration and Nationality Act, mandates that employers only hire individuals who may legally work in the United States. This includes United States citizens and nationals as well as authorized aliens. Employers who violate the IRCA may be subject to civil and criminal penalties.More... |
| PERFORMANCE BONDS IN FEDERAL CONSTRUCTION PROJECTS |
| The Miller Act provides that a general contractor, who enters into a contract for the construction, alteration, or repair of any federal building, which contract exceeds the sum of $ 100,000, shall furnish a performance bond on behalf of the federal government. The performance bond guarantees that the contractor will perform all the conditions of the contract and will pay the government all taxes that are imposed by the government.More... |
| TERMINATION OF FEDERAL CONSTRUCTION CONTRACTS BASED ON DEFAULT |
| Construction contracts with the federal government must generally be completed by the scheduled completion date because the government has an interest in its occupancy or use of a project. The government normally secures the completion of the project by the scheduled completion date through performance bonds, penalties for delay, or escrow accounts.More... |
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