ARKANSAS CONSTRUCTION LAW
Table of Contents
FORWARD
ACKNOWLEDGMENTS
ABOUT THE AUTHORS
CHAPTER ONE
SOURCES OF ARKANSAS CONSTRUCTION LAW
1.1 Statutes and Regulations
1.2 Common Law (“Case Law”)
1.3 Local Ordinances
CHAPTER TWO
DESIGN PROFESSIONAL AND CONTRACTOR LICENSING
2.1. Licensing of Design Professionals
2.1.1 Engineering
2.1.1.1 The Practice of Engineering
2.1.1.2 Requirements for Licensure
2.1.1.3 Reciprocity
2.1.2 Architecture
2.1.2.1 The Practice of Architecture
2.1.2.2 Requirements for Licensure
2.1.2.3 Reciprocity
2.1.2.4 Practice as a Corporation or Partnership
2.1.2.5 Exemption from Licensing
2.2 Contractor Licensing
2.2.1 Commercial Contractor Licensing
2.2.1.1 Commercial License Specialties
2.2.2 Residential Contractor Licensing
2.2.3 Enforceability of Contracts by an Unlicensed Contractor
PRACTICE POINTERS
CHAPTER THREE
BUILDING CODES AND PERMITS
3.1 Applicable Codes
3.1.1 Arkansas Fire Prevention Code
3.1.2 Arkansas Plumbing Code
3.1.3 Arkansas Electrical Code
3.1.4 Arkansas Mechanical Code
3.1.5 Arkansas Fuel Gas Code
3.2 Enforcement of Codes Through Civil Actions
3.2.2 Building Inspectors
3.2.3 Certificates of Occupancy
3.3 Building Permits
3.3.1 When is a Permit Required
3.3.2 Process to Obtain a Permit
3.4 Buildings that must be Designed by a Licensed Architect or Engineer
3.4.1 Special Inspections that must be Provided by Owner or Design Professional
PRACTICE POINTERS
CHAPTER FOUR
BIDDING AND OTHER PROCUREMENT METHODS
4.1 Introduction
4.2 The Scope of Arkansas’ Bidding Statutes
4.3 Methods of Contracting
4.4 Criteria for Award
4.5 Exceptions to Competitive Bidding
4.6 Bidder Prequalification
4.7 Bidding Mistakes
4.8 Subcontracting
4.9 Bid Protests
4.10 Bidding Private Construction Jobs
4.11 Unfair Trade Practices
CHAPTER FIVE
CONSTRUCTION CONTRACT LAW
5.1 Types of Contracts
5.2 Contract Interpretation
5.2.1 Intent of Parties
5.2.2 Contract Interpreted as a Whole
5.2.3 The Parol Evidence Rule
5.2.4 Common and Technical Meanings of Contract Language
5.2.5 Course of Performance or Prior Dealings
5.3 Key Contract Clauses
5.3.1 Choice of Law
5.3.2 Forum Selection Clauses
5.3.3 Scope of Work and Changes
5.3.4 Liquidated Damages
5.3.5 Indemnity
5.3.6 Notice
5.3.7 Time of Completion
5.3.8 No Damage for Delay
5.3.9 Right to Stop Work
5.3.10 Waiver of Consequential Damages
5.3.11 Changed Conditions
5.3.12 Contingent Payment Clauses
5.3.13 Retainage
PRACTICE POINTERS
CHAPTER SIX
BONDS AND INSURANCE IN ARKANSAS
6.1 Bonds
6.1.1 Bid Bonds
6.1.2 Payment Bonds
6.1.3 Performance Bonds
6.2 Insurance
6.2.1 Insurance for Construction Projects in Arkansas
6.2.2 Rules of Interpretation for Insurance Policies in Arkansas
6.2.3 Builder’s Risk Insurance
6.2.4 Commercial General Liability Insurance and the Indemnity Agreement
PRACTICE POINTERS
CHAPTER SEVEN
CHANGE ORDERS
7.1 The Reality of Construction Contract Modification
7.2 Change Orders in General
7.3 Formal Change Procedures
7.4 Change Orders Versus Construction Change Directives
7.5 Consideration for Contract Modifications
7.6 Contractor’s Duty to Proceed with Disputed Work and Constructive Changes
PRACTICE POINTERS
CHAPTER EIGHT
MECHANICS’ AND MATERIALMENS’ LIENS
8.1 Right to a Mechanics’ Lien
8.1.1 Nature of Services Rendered and Materials Furnished
8.1.1.1 Profit and Overhead
8.1.1.2 Delay Damages
8.1.2 Necessity of Written Contract or Consent of Owner
8.1.3 Persons Entitled to a Lien
8.1.4 Residential Construction Liens
8.2 Interests Subject to Mechanics’ Liens
8.2.1 Private Projects
8.2.1.1 Projects Involving Leasehold Interests
8.2.2 Public Projects
8.3 Perfecting a Mechanics’ Lien
8.3.1 Preconstruction Notice
8.3.2 Preliminary Notices
8.3.2.1 75-Day Notice
8.3.2.2 10-Day Notice
8.3.3 Filing the Statement of Lien
8.3.3.1 Time for Filing
8.3.3.2 Place for Filing
8.3.4 Notice of Filing
8.3.5 Accrual and Duration of Lien
8.4 Lien Priority
8.4.1 Priority Between Mechanics’ Lien Claimants and Other Creditors
8.4.2 Priority Between Mechanics’ Lien Claimants
8.5 Enforcement of a Mechanics’ Lien
8.5.1 Time to Sue
8.5.2 Parties to the Lawsuit
8.5.3 Venue
8.5.4 The Complaint
8.5.4.1 Other Claims
8.5.5 Execution and Enforcement of Judgment
8.6 Lien Prevention and Defenses
8.6.1 Pre-Project Due Diligence
8.6.2 Payment Bonds
8.6.3 Releases and Waivers of Liens During Performance
8.6.4 Bonding Off Liens
8.6.5 Payment
8.6.6 Releases of Mechanics’ Liens
PRACTICE POINTERS
CHAPTER NINE
CONSTRUCTION DISPUTES – THEORIES OF LIABILITY
9.1 Breach of Contract
9.1.1 Breach of Warranty
9.1.1.1 Express Warranties
9.1.1.2 Implied Warranties
9.1.1.3 Owner’s Implied Warranty with Respect to the Accuracy and Suitability of Plans
9.2 Quasi Contract Claims
9.2.1 Promissory Estoppel
9.2.2 Unjust Enrichment
9.3 Torts
9.3.1 Negligence
9.3.1.1 Negligence Between Parties who are in Privity of Contract
9.3.2 Negligent Misrepresentation
9.3.3 Fraud
9.3.4 Economic Loss Rule
9.4 Statutory Actions
9.4.1 Violation of Building Code
9.4.2 Mechanics’ Liens
9.4.3 Failure to Make a Required Disposition of Funds
9.4.3.1 Failure to Discharge a Mechanics’ Lien
9.4.3.2 Defrauding a Materialman
9.4.3.3 Conversion
CHAPTER TEN
STATUTES OF LIMITATION AND REPOSE
10.1 Statutes of Limitations for Contract
10.1.1 Written Contracts
10.1.2 Oral Contracts
10.1.3 Bond Claims
10.1.4 Breach of Warranty
10.2 Statutes of Limitations Applicable to Tort Actions
10.2.1 General Negligence Claims
10.2.2 Professional Negligence
10.2.3 Claims for Trespass to Real Property
10.2.4 Building Code Violation
10.2.5 Action for Damages against Home Inspector
10.3 Arkansas Statute of Repose
PRACTICE POINTERS
CHAPTER ELEVEN
DAMAGES
11.1 Consequential Damages
11.1.1 Definition of Consequential Damages
11.1.2 Waiver of Consequential Damages
11.1.3 Lost Profits
11.2 Liquidated Damages
11.3 Delay Damages
11.3.1 Contractor Delay Damages
11.3.2 No Damages for Delay Clause
11.4 Damages for Defective or Incomplete Construction
11.5 Contractor’s Damages on Termination
11.6 Direct Costs
11.7 Attorneys’ Fees
11.8 Interest
11.8.1 Pre-Judgment Interest
11.8.2 Post-Judgment Interest
11.9 Mitigation of Damages
PRACTICE POINTERS
CHAPTER TWELVE
ALTERNATIVE DISPUTE RESOLUTION
12.1 Mediation
12.1.1 The Mediation Process
12.1.2 Arkansas Mediation Programs
12.2 Arbitration
12.2.1 Basis of Arbitration Law
12.2.1.1 Arkansas Uniform Arbitration Act
12.2.1.2 Federal Arbitration Act
12.2.2 Enforceability
12.2.2.1 Scope of Agreements to Arbitrate
12.2.2.2 Waiver of Arbitration
12.2.2.1 Waiver by Participation in a Lawsuit
12.2.3 Authority of the Arbitrator
12.2.3.1 Arbitrator’s Decision Must Be within Scope of Submission
12.2.3.2 Arbitrator Decides Procedural Issues
12.2.4 Applicability to Sureties
12.2.4.1 Surety Bonds are Distinguishable from Insurance Contracts
12.2.4.2 Surety Bonds are Subject to Arbitration Clauses that are Incorporated by Reference in the Prime Contract
12.2.5 Consolidation
12.2.6 Enforcement of Arbitration Awards
12.2.6.1 Vacating or Modifying an Arbitration Award
12.2.7 Liability of Arbitrators
PRACTICE POINTERS
APPENDIX
CONTACT INFORMATION
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