GEORGIA  CONSTRUCTION  LAW

 

TABLE OF CONTENTS................................................................i

PREFACE......................................................................................... ix

ACKNOWLEDGEMENTS..........................................................xi

ABOUT THE AUTHORS............................................................ xiii

CHAPTER ONE LICENSING ................................................................................1
I. INTRODUCTION ................................................................................1
II. LICENSING REQUIREMENTS ................................................................................2
A. “What is Contracting?” ................................................................................2
B. Residential and General Contractors ................................................................................2
1. Licensing Requirements for Residential-Basic and Residential- Light Commercial Contractors ................................................................................3
2. Licensing Requirements for General Contractors ................................................................................4
3. Qualifying Agents for Business Organizations ................................................................................5
4. Applicants Exempt from Licensing Exam ................................................................................6
5. Fees ................................................................................7
6. Penalties for Non-Compliance ................................................................................7
III. TRADE CONTRACTORS ................................................................................8
A. Electrical Contractors ................................................................................8
B. Master and Journeyman Plumbers ................................................................................9
1. Decisions ................................................................................10
C. Conditioned Air Contractors ................................................................................11
D. Low Voltage Contractors ................................................................................12
E. Utility Contractors ................................................................................13

IV. Specialty Contractor Exemption ................................................................................14
A. Traditional Specialty Contractors ................................................................................14
B. Limited Service Specialty Contractors ................................................................................15
1. Above Ground Storage Tanks/Silos ................................................................................15
2. Bridge Construction ................................................................................16
3. Concrete Vaults ................................................................................16
4. Manufactured Units for Temporary Use/Classroom Trailers ................................................................................16
5. Environmental Remediation ................................................................................17
6. Sitework ................................................................................17
7. Outdoor Environment (pools) ................................................................................17
8. Streetscapes ................................................................................18
9. Concrete Work ................................................................................18
10. Masonry ................................................................................19
11. Rough Carpentry ................................................................................19
12. Finish Carpentry ................................................................................19
13. Remediation ................................................................................20
14. Siding and Cornice Work ................................................................................20
15. EIFS and Stucco ................................................................................20
16. Re-Roofing and Existing Structures ................................................................................21
17. Drywall, Insulation, Studs & Acoustical ................................................................................21
18. Pre-Manufactured Structures ................................................................................21
19. Refrigeration (not free standing) ................................................................................22
20. Greenhouses ................................................................................22
21. Pre-Engineered Metal Building ................................................................................22
22. Industrial Specialty Work ................................................................................23
23. Boilers ................................................................................23
24. Cooling Towers ................................................................................24
25. Turf, Track and Field ................................................................................24
26. Synthetic Sports Turf ................................................................................24
27. Tennis Court ................................................................................25
28. Parks and Recreation ................................................................................25
29. Cell Towers ................................................................................25
30. Landfills ................................................................................26
31. Signage Contractor ................................................................................26
32. Substations ................................................................................26
V. RECIPROCITY ................................................................................27
VI. MILITARY CERTIFICATIONS ................................................................................27
VII. NONRESIDENT CONTRACTORS ................................................................................28
A. Nonresident Contractor Act ................................................................................28
CHAPTER TWO BIDDING ................................................................................31
I. INTRODUCTION ................................................................................31
II. PUBLIC PROJECTS ................................................................................31
A. Competitive and Open Bidding ................................................................................31
B. State Agencies ................................................................................32
C. Types of Delivery Systems ................................................................................32
1. Design-Bid-Build ................................................................................33
2. Construction Manager/General Contractor ................................................................................33
3. Design-Build ................................................................................33
D. State Procurement Laws ................................................................................34
1. State Procurement Act ................................................................................34
2. The Bidding Process ................................................................................35
3. Counties and Municipalities ................................................................................37
4. Georgia Department of Transportation (GDOT) ................................................................................42
5. State Road and Tollway Authority ................................................................................46
6. County Road Systems ................................................................................47
7. Municipal Road Systems ................................................................................48
III. PRIVATE PROJECTS ................................................................................50
IV. WITHDRAWAL, MODIFICATION, RELEASE, AND EXPIRATION OF BIDS ................................................................................51
A. Withdrawal of Bids ................................................................................51
1. Generally ................................................................................51
2. Before Formal Acceptance ................................................................................51
3. Consideration of Other Bids After Withdrawal/Resubmitting Bids ................................................................................52
4. Modification of Bids ................................................................................53
B. Expiration of Bids ................................................................................53
1. Competitive Sealed Bids ................................................................................53
2. Competitive Sealed Proposals ................................................................................54
C. Bid Bonds (Generally) ................................................................................54
D. Equitable Rescission ................................................................................54
1. Bids on Private Projects ................................................................................54
2. Equitable Rescission is Unavailable as a Remedy for Bids on Public Projects ................................................................................ 55
V. BID PROTESTS ................................................................................55
A. Administrative Remedies ................................................................................55
B. Right to Reject Bids ................................................................................56
C. Standing to Bring a Protest ................................................................................56
1. Low Bidders ................................................................................56
2. Rejected Proposer ................................................................................57
3. Taxpayer Standing ................................................................................57
D. Available Due Process ................................................................................57
1. Hearing for Prospective Bidders ................................................................................57
2. Available Relief ................................................................................57

CHAPTER THREE ARCHITECT AND ENGINEER ................................................................................59
I. INTRODUCTION ................................................................................59
II. STATE REGULATION OF ARCHITECTS AND ENGINEERS................................................................................59
A. Architects ................................................................................60
1. Licensing Requirements ................................................................................60
B. Engineers ................................................................................63
1. Licensing Requirements ................................................................................64
III. POTENTIAL LIABILITY FOR DESIGN PROFESSIONALS ................................................................................65
A. Sources of Liability ................................................................................65
1. Contractual Liability ................................................................................66
2. Negligent Design ................................................................................68
3. Negligent Supervision ................................................................................70
4. Liability to third parties for duties created by law or accepted industry standard ................................................................................72
B. Standard of Care Affidavits ................................................................................72
IV. CONTRACTUAL LIMITATIONS OF LIABILITY ................................................................................74

CHAPTER FOUR CONTRACTS ................................................................................77
I. INTRODUCTION ................................................................................77
II. INTERPRETING CONTRACTS ................................................................................78
III. IMPORTANT CONTRACT CLAUSES ................................................................................79
A. Payment Clauses ................................................................................80
B. Termination Clauses ................................................................................83
1. Termination for Convenience ................................................................................83
2. Termination for Cause ................................................................................84
C. Force Majeure ................................................................................85
D. Warranty of Plans and Specifications ................................................................................87
1. The Spearin Doctrine ................................................................................87
2. The Builder’s Warranty ................................................................................88
3. Express Warranties ................................................................................91
4. Disclaimers 92
E. Provisions Relating to the Timing of Performance ................................................................................92
F. No Damages for Delay ................................................................................94
G. Flowdown Provisions ................................................................................94
H. Waiver of Jury Trial ................................................................................96
I. Indemnification Clauses ................................................................................96
IV. BREACH OF CONTRACT ACTIONS ................................................................................96
A. Substantial Performance ................................................................................97
B. The Acceptance Doctrine ................................................................................97
C. Attorneys' Fees ................................................................................98

CHAPTER FIVE CHANGE ORDERS AND EXTRA WORK ................................................................................101
I. INTRODUCTION ................................................................................101
II. WHAT IS EXTRA WORK? ................................................................................101
III. CARDINAL CHANGE ................................................................................104
IV. DEDUCTIVE CHANGE ORDERS ................................................................................104
V. RECOVERY IN QUANTUM MERUIT ................................................................................105
VI. NOTICE AND PROCEDURE REQUIREMENTS ................................................................................110
A. Does the notice provision apply? ................................................................................110
B. Was notice sufficient? ................................................................................111
C. Is there actual notice? ................................................................................112
D. Did the owner waive the notice or written change order requirement? ................................................................................ 112
E. Can an oral change order be enforced? ................................................................................113

CHAPTER SIX DIFFERING SITE CONDITIONS ................................................................................115
I. SHIFTING OF RISK ................................................................................115
II. DIFFERING SITE CONDITIONS CLAIMS TYPES ................................................................................116
III. DEFENSES ................................................................................117
A. Exculpatory Clauses ................................................................................117
B. Notice Requirements ................................................................................117

IV. CHANGED CONDITIONS ABSENT CONTRACT CLAUSES ................................................................................118
CHAPTER SEVEN DELAY AND DISRUPTION ................................................................................121
I. INTRODUCTION ................................................................................121
II. DELAY ................................................................................122
A. Time is of the Essence ................................................................................122
B. Inexcusable, Excusable, and Compensable Delay ................................................................................123
C. Notice Requirements Associated with Project Delay ................................................................................125
D. Concurrent Delay ................................................................................127
E. No Damages for Delay ................................................................................127
F. Delay Damages ................................................................................128
1. Liquidated Damages ................................................................................128
2. Delay Damages Available to the Contractor ................................................................................129
G. Incorporation by Reference ................................................................................130
H. Liquidating Agreements ................................................................................131
I. Acceleration and Constructive Acceleration ................................................................................132
III. DISRUPTION ................................................................................133

CHAPTER EIGHT LIMITATIONS OF ACTIONS ................................................................................137
I. STATUTES OF LIMITATION ................................................................................137
A. Contract Actions ................................................................................137
B. Tort Actions ................................................................................139
1. Actions for Injuries to Persons ................................................................................139
2. Actions for Damage to Real Property ................................................................................140
II. STATUTE OF REPOSE ................................................................................141

CHAPTER NINE RISK MANAGEMENT: INSURANCE AND INDEMNIFICATION ................................................................................143
I. INTRODUCTION ................................................................................143
II. INDEMNIFICATION CLAUSES ................................................................................143
III. Insurance ................................................................................145
A. Types of Insurance ................................................................................145
1. The Commercial General Liability Policy ................................................................................145
2. Umbrella Liability Coverage ................................................................................146
3. Builder’s Risk ................................................................................146
4. Professional Liability Coverage ................................................................................146
5. Contractor’s Pollution Coverage ................................................................................146
B. Considerations When Selecting an Insurance Carrier ................................................................................147
C. Exclusion Issues ................................................................................148
1. Claims-Made/Claims-Occurrence Exclusions ................................................................................148
2. Contractor/Project-Type Exclusions ................................................................................149
3. Contractual Liability Exclusions ................................................................................149
4. Damage Exclusions ................................................................................150
5. Cost of Defense Exclusions ................................................................................150
D. The Additional Insured ................................................................................150

CHAPTER TEN BONDS ................................................................................153
I. INTRODUCTION ................................................................................153
II. PAYMENT BONDS ................................................................................153
A. Statute Of Limitations ................................................................................158
B. Remedies ................................................................................158
III. PERFORMANCE BONDS ................................................................................159
A. Remedies ................................................................................160

CHAPTER ELEVEN LIENS ................................................................................161
I. HISTORY AND PURPOSE ................................................................................161
II. ENTITLEMENT TO LIEN RIGHTS ................................................................................162
A. Property/Property Interests Subject To Liens ................................................................................164
III. BURDEN OF PROOF/STANDARD OF REVIEW ................................................................................164
IV. BURDEN TO BRING SUIT/PRIVITY ................................................................................165
V. BURDEN OF PROOF/USE OF MATERIALS ................................................................................165
VI. BURDEN – PAYMENT DISPUTE ................................................................................165
VII. PROPERTY INTERESTS SUBJECT TO LIENS ................................................................................166
VIII. STATUTORY REQUIREMENTS ................................................................................167
A. Notice of Commencement ................................................................................167
B. Notice to Contractor ................................................................................168
C. Preliminary Notice of Lien ................................................................................169
IX. PERFECTING A CLAIM OF LIEN ................................................................................169
A. Priority of Liens ................................................................................171
X. GEORGIA’S LIEN STATUTE ................................................................................171
A. Damages/What is Lienable ................................................................................172
XI. CONCLUSION ................................................................................172

CHAPTER TWELVE LITIGATION AND ALTERNATIVE DISPUTE RESOLUTION ................................................................................ 175
I. INTRODUCTION ................................................................................175
II. MEDIATION ................................................................................176
III. GEORGIA ARBITRATION CODE ................................................................................177
A. General Statutory Provision ................................................................................177
B. The Scope of Arbitration ................................................................................178
1. Specific Issues Reserved for Arbitration ................................................................................178
2. Gateway/Threshold Issues for Arbitrating ................................................................................178
3. Enforcing an Arbitration Provision ................................................................................180
4. Discovery ................................................................................183
5. The Hearing ................................................................................184
6. Determination of an Award ................................................................................185
7. Change of an Award by the Arbitrators ................................................................................185
8. Court’s Confirmation of an Arbitration Award and Entry of Judgment ................................................................................186
9. Court’s Vacatur of an Arbitration Award ................................................................................187
10. A Court’s Modification of an Arbitration Award ................................................................................190
IV. FEDERAL ARBITRATION ACT ................................................................................191
A. General Statutory Provision ................................................................................191
B. Gateway/Threshold Issues ................................................................................191
1. Arbitrability Involving Parties to a Contract ................................................................................191
2. Arbitrability Involving Nonsignatories to a Contract ................................................................................192
3. Waiver of Right to Arbitrate ................................................................................193
C. The Scope of an Arbitration Agreement ................................................................................194
1. Transactions Involving Commerce ................................................................................194
D. Enforceability of an Arbitration Provision ................................................................................194
1. Based on the Agreement ................................................................................194
2. Restrictions on Enforceability ................................................................................194
E. Enforcing an Arbitration Provision ................................................................................195
1. Application for Enforcement ................................................................................195
2. Stay of Pending Litigation ................................................................................196
F. Arbitration Procedure ................................................................................196
1. Choosing an Arbitrator ................................................................................196
2. The Hearing ................................................................................196
G. A Court’s Confirmation of an Arbitration Award and Entry of Judgment ................................................................................196
H. A Court’s Vacatur of an Arbitration Award ................................................................................197
1. Notice of Motion to Vacate an Award ................................................................................197
2. Cannot Serve as a Collateral Attack on a Motion to Confirm an Award ................................................................................198
3. Grounds for Vacating an Award ................................................................................198
4. Rehearing upon a Vacated Award ................................................................................199
5. Appealing a District Court’s Vacatur Decision ................................................................................199
I. A Court’s Modification/Correction of an Arbitration Award ................................................................................199
J. Appeals of District Court Arbitration Decisions ................................................................................200
1. Order to Compel Arbitration is a Final Order Subject to Appeal ................................................................................201
2. Stay of Litigation Pending Appeal ................................................................................201
3. Standard of Review for Order to Compel Arbitration ................................................................................201
V. VERTICAL CHOICE OF LAW /PREEMPTION ................................................................................201
A. General Principle ................................................................................201
B. Enforceability of an Arbitration Provision ................................................................................201
C. Choice of Law Provision ................................................................................202
D. Confirming an Award ................................................................................202
E. Vacating an Award ................................................................................202
F. Insurance Claims ................................................................................202
VI. LITIGATION ................................................................................203
A. As the Result of No Valid Agreement to Arbitrate ................................................................................203
B. As the Result of an Exception to the Georgia Arbitration Code ................................................................................203
C. Insurance ................................................................................203
D. Residential Real Estate ................................................................................203
1. Initialing Requirement ................................................................................203
2. Inapplicable to “Home Building Agreements” ................................................................................204
E. Personal Injury Tort Claims ................................................................................204
TABLE OF LAWS & RULES ................................................................................205
TABLE OF CASES ................................................................................217
INDEX ................................................................................237
252