#140:  Including Overhead and Profit In Mechanic's Lien Amounts
NH Construction Law Blog
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1w ago
New Hampshire’s mechanic’s lien statute, RSA 447:2, gives a lien to those who “perform labor, provide professional design services, or furnish materials” to improve someone’s real estate.  The lien “provides security against the property owner for the value of the labor or materials rendered.”  Pine Gravel, Inc. v. Cianchette, 128 N.H. 460, 464 (1986).  The statute is silent on how that “value” is measured, but the common pract ..read more
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#139:  Constitutionality of Federal Set-Asides for Disadvantaged Contractors
NH Construction Law Blog
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1M ago
In 1983, Congress authorized the Disadvantaged Business Enterprise (“DBE”) program, requiring the U.S. Department of Transportation to ensure that at least 10% of funding for federally-assisted highway and transit projects is set aside for businesses at least 51%-owned and controlled by “socially and economically disadvantaged” individuals.  Federal construction contracts worth billions of dollars have gone to such businesses through programs administered by the stat ..read more
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#138:  2024 Legislative Update
NH Construction Law Blog
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2M ago
This summer has seen a number of state legislative measures that affect the construction industry, both to update codes and to attempt to spark additional housing. It was just a couple of years ago that New Hampshire updated its State Building Code to the 2018 versions of the International Building Code, International Residential Code and other related ICC codes governing construction. (Blog #115)  On August 2, 2024, Governor Sununu signed into law an amendment of RSA 155-A that adopts ..read more
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#137:  Liability for Negligent Selection of Subcontractors
NH Construction Law Blog
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3M ago
It is well established that general contractors are vicariously liable for damages resulting from the negligence of their employees, but not of their independent contractors except in the case of “inherently dangerous” activities, Arthur v. Holy Rosary Credit Union, 139 N.H. 463 (1995).  But a general contractor can be liable for its own negligence in hiring an incompetent subcontractor.   “As a general rule, the employer has a duty to use reasonable care to choose a contractor who is properly qualified to perform the work. . .  ‘[A]n employer of an independent contractor may be ..read more
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#136:  Fixed Price vs. “Cost Plus” Contracts: Some Considerations
NH Construction Law Blog
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4M ago
When contracting parties agree to a fixed price or lump sum amount for a defined scope of work, the contractor is generally obligated to build that scope of work for that price regardless of what it costs him to do so or what unmentioned obstacles he may face.  His price will typically be set to cover overhead costs and a reasonable profit.  And time is money; all other things being equal, the sooner the contractor completes the work, the more profit he will make.  Framing a building in a week rather than two, or drywalling a room in a day rather than two, saves money and acts a ..read more
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#135:  Unconscionable Arbitration Agreements
NH Construction Law Blog
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7M ago
“An agreement to arbitrate may be unenforceable if pursuing a claim in arbitration is so cost prohibitive that it prevents a party from vindicating its rights.”  With that opening sentence, the Texas Supreme Court in Lennar Homes of Texas, Inc. v. Rafiei, 2024 WL 1470909 (April 5, 2024), recently rendered an opinion worth noting by all residential contractors, including in New Hampshire, who insert arbitration clauses with fee-splitting provisions in their contracts as a strategy for discouraging claims.   In Lennar a homeowner sued his builder for personal injuries that he blamed on ..read more
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#134:  30-Day Accountings for Subcontractor/Supplier Mechanic’s Liens
NH Construction Law Blog
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8M ago
It is generally recognized by New Hampshire courts that “[f]ailure to comply with the specific statutory provisions of perfecting a mechanics lien is usually fatal,” Alex Builders & Sons, Inc. v. Danley, 161 N.H. 19, 23 (2010).  Yet one of those statutory provisions, RSA 447:8, is in my experience regularly ignored by subcontractors and suppliers to whom it applies.  It states:    “Any person giving notice as provided in RSA 447:5-7 shall, as often as once in 30 days, furnish to the owner, or person having charge of the property on which the lien is claimed, an account ..read more
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#133:  DOL's Latest Independent Contractor Rule
NH Construction Law Blog
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9M ago
On January 10, 2024, the U.S. Department of Labor issued its new rules on how to properly classify workers as either employees or independent contractors under the Fair Labor Standards Act.   The new rules are slated to go into effect on March 11, 2024, and reinstate the so-called “economic realities” test for determining whether a worker is in fact in business for himself.  According to DOL, the new rules “will help to ensure that workers who are employees are paid the minimum wage and overtime due to them, and that responsible employers that comply with the law are not pl ..read more
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#132:  Written Change Order Requirements
NH Construction Law Blog
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11M ago
Many construction contracts and subcontracts, both residential and commercial, provide that any addition or deletion from the scope of work described in the contract must be documented by a written change order.   The purpose of these written change order requirements is obvious: to avoid disputes down the road over the existence of, extent of, or price and time effects of changes to the work.   In the press to get a project completed, contractors and their customers sometimes ignore such contract language, agreeing on a change but failing to get a written change order signed.&n ..read more
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#131:  Applying Statutes of Limitations in Arbitration Proceedings
NH Construction Law Blog
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1y ago
New Hampshire’s three-year statute of limitations for filing lawsuits, RSA 508:4, states “Except as otherwise provided by law, all personal actions, except actions for slander or libel, may be brought only within 3 years of the act or omission complained of . . .”  The phrase “personal actions” is not defined in the statute.  Does it encompass arbitration proceedings?   Neither the Federal Arbitration Act, 9 U.S.C. § 1 et seq., nor New Hampshire’s state arbitration act, RSA 542, mentions the statute of limitations.  The New Hampshire Supreme Court implicitly assumed applica ..read more
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