INDIANA CONSTRUCTION LAW
TABLE OF CONTENTS

 

 

FOREWARD........................................................................................ ix

About the author.................................................................................. xi

 

Chapter One:

BIDDING.............................................................................................. 1

I.              INTRODUCTION....................................................................... 1

II.           BASIC CONTRACT LAW AND BIDDING

         ON CONSTRUCTION PROJECTS............................................. 1

III.         RELIEF FROM BID MISTAKES................................................ 2

A.     Unilateral Mistake................................................................. 3

B.     Mutual Mistake..................................................................... 4

IV.        RULES AND REQUIREMENTS FOR PUBLIC

         CONTRACT BIDDING.............................................................. 5

A.     Introduction.......................................................................... 5

B.     Bidding Title 4 Projects – Governing Most

                  State Related Projects............................................................ 6

C.     Bidding Title 5 Projects – State Universities

                  and Other Miscellaneous Projects......................................... 8

D.     Bidding Title 8 Projects – Indiana

                  Department of Transportation............................................. 10

E.      Bidding on Title 36 Projects – Municipal/

                  Local Government Contracting........................................... 10

F.      Special Rules for Bidding Design Build

                  Public Works Projects......................................................... 12

V.           BID PROTESTS........................................................................ 13

VI.        CONCLUSION......................................................................... 15

 

Chapter Two:

CONTRACTORS................................................................................ 19

I.              INTRODUCTION..................................................................... 19

II.           THE CONSTRUCTION CONTRACT....................................... 20

A.     American Institute of Architect’s

                  General Conditions............................................................. 20

B.     The Contract Documents.................................................... 20

C.     Review of Contract Documents and

                  Field Conditions................................................................. 22

D.     Supervision......................................................................... 22

E.      Warranties.......................................................................... 24

F.      Scheduling.......................................................................... 31

G.     Shop Drawings and Submittals........................................... 31

H.     Indemnification.................................................................. 32

I.        Payment.............................................................................. 36

J.       Insurance............................................................................ 38

K.     Default and Termination..................................................... 39

III.         INDIANA’S STATUTE OF REPOSE........................................ 45

IV.        INDIANA’S DESIGN-BUILD STATUTE FOR

         PUBLIC WORKS PROJECTS................................................... 46

V.           INDIANA’S HOME IMPROVEMENT

         CONTRACTS ACT.................................................................. 48

VI.        QUALIFICATION AND LICENSING ISSUES......................... 51

VII.      CONCLUSION......................................................................... 52

 

Chapter Three:

SUBCONTRACTOR.......................................................................... 55

I.              INTRODUCTION..................................................................... 55

II.           CONTRACTING...................................................................... 55

A.     Implied Terms ................................................................... 55

1.      Custom and Usage........................................................ 56

2.      “Reasonableness”......................................................... 56

3.      Laws and Codes........................................................... 57

4.      Good Faith and Fair Dealing......................................... 57

5.      Duty Not to Hinder Performance.................................. 57

6.      Reasonable Skill and Fitness for

Particular Purpose......................................................... 58

B.     Contract Forms................................................................... 58

III.         PERFORMANCE OF THE CONTRACT.................................. 61

A.     Timing................................................................................ 61

B.     Payment.............................................................................. 61

1.      Conditional or Contingent Payments............................. 61

2.      Mechanic’s Liens.......................................................... 65

3.      Public Works Projects................................................... 65

IV.        SUBCONTRACTOR’S WARRANTY

         AND GUARANTEES............................................................... 65

V.           INDEMNIFICATION............................................................... 66

VI.        DEFAULT AND TERMINATION............................................ 67

VII.      CONCLUSION......................................................................... 68

 

Chapter Four:

THE ARCHITECT AND ENGINEER............................................... 71

I.              INTRODUCTION..................................................................... 71

II.           INDIANA ARCHITECT AND ENGINEER

         LICENSING LAW.................................................................... 71

A.     Architect Licensing Law..................................................... 72

1.      Qualifications to Sit for the Examination...................... 73

2.      Content of the Examination.......................................... 75

3.      Persons Exempt from the Examination......................... 75

4.      Reciprocity for Out-of-State Architects........................ 76

5.      Conduct of Registered Architects................................. 77

6.      The Registered Architect’s Ethical

Obligations................................................................... 78

7.      Penalties for Misconduct and

Enforcement Procedure................................................ 79

B.     Engineer Licensing Law...................................................... 82

1.      The Board of Registration for

Professional Engineers.................................................. 82

2.      The Practice of Engineering.......................................... 82

3.      Persons Exempt from Licensing

Requirements................................................................ 84

4.      Reciprocity for Out-of-State Engineers......................... 84

5.      Qualifications Necessary to Take

Examination................................................................. 85

6.      Contents of Examination.............................................. 87

7.      Conduct of Registered Professional

Engineer....................................................................... 88

a.       Engineer’s Seal....................................................... 88

b.      Registered Engineer’s Professional

Conduct.................................................................. 88

8.      Penalties for Misconduct and

Enforcement................................................................. 90

III.         THE DESIGN PROFESSIONAL’S

         POTENTIAL LIABILITY......................................................... 90

A.     The Design Professional’s Potential

      Liability to Employer and Third Persons............................. 90

1.      The Design Professional’s Duty to

Prepare Plans and Specifications in

Accordance with the Applicable

Standard of Care........................................................... 91

2.      The Design Professional’s Duty to

Supervise Implementation of Plans

and Specifications........................................................ 93

B.     The Design Professional’s Potential

      Liability to Contractors....................................................... 95

IV.        CONCLUSION......................................................................... 98

 

Chapter Five:

BONDS AND LIENS......................................................................... 105

I.              INTRODUCTION................................................................... 105

II.           INDIANA MECHANIC’S LIEN LAW.................................... 106

A.     History and Purpose of Indiana

      Mechanic’s Lien Statute.................................................... 106

B.     Rules of Statutory Construction........................................ 107

C.     Persons Entitled to Assert Mechanic’s

      Lien Rights....................................................................... 108

D.     Types of Projects Potentially Subject to

      a Mechanic’s Lien............................................................ 109

E.      Perfecting the Mechanic’s Lien......................................... 110

1.      Notice of Intention to Hold

Mechanic’s Lien......................................................... 110

2.      Amount Claimed........................................................ 111

3.      Name and Address of Claimant.................................. 111

4.      Owner’s Name and Address....................................... 111

5.      Legal Description of Property..................................... 112

6.      Pre-Lien Notice Requirements.................................... 112

7.      Filing Suit to Foreclose Mechanic’s

      Lien............................................................................ 113

F.      Attorney’s Fees................................................................. 114

G.     No-Lien Contracts............................................................ 116

H.     Contractual Lien Waivers................................................. 117

I.        Priorities........................................................................... 117

J.       Personal Liability Notices................................................. 118

III.         PUBLIC WORKS PROJECTS................................................. 119

A.     Construction Surety Bonds............................................... 120

1.      Nature of Surety Relationship..................................... 121

2.      Surety Bonds on Public Works Projects...................... 122

a.       Title 4 State Department of

      Administration Projects......................................... 122

b.      Title 5 State Funded Projects................................. 124

c.       Title 8 Indiana Department of

      Transportation Projects......................................... 126

d.      Title 36 Municipality and Local

      Projects................................................................. 128

B.     Indiana’s Prompt Payment Act......................................... 129

IV.        CONCLUSION....................................................................... 131

 

Chapter Six:

CHANGES........................................................................................ 137

I.              INTRODUCTION................................................................... 137

II.           THE CHANGES CLAUSE...................................................... 138

A.     History of the Changes Clause.......................................... 138

B.     Cardinal Changes.............................................................. 139

III.         TYPES OF CHANGES........................................................... 141

A.     Formal Change Orders...................................................... 142

B.     Construction Change Directive......................................... 142

C.     Minor Changes................................................................. 145

D.     Value Engineering............................................................ 145

E.      Constructive Changes/Claims........................................... 146

1.      Type I Constructive Change:

      Contract Misinterpretation.......................................... 147

a.       Specification Ambiguity or Defect....................... 147

b.      Hypertechnical Field Inspection........................... 148

c.       Specification Waiver............................................ 148

2.      Type II Constructive Change:

      Owner Interference or Failure to

      Cooperate................................................................... 149

3.      Type III Constructive Change:

      Defective or Impracticable Specifications.................. 151

4.      Type IV Constructive Change:

      Wrongful Withholding of Superior

      Knowledge................................................................. 153

5.      Type V Constructive Change:

      Acceleration............................................................... 155

6.      Contracts Implied-in-Fact and

      Implied-in-Law........................................................... 157

IV.        CLAIM REQUIREMENTS..................................................... 158

A.     Timely Claim Notice......................................................... 158

B.     Written Order.................................................................... 160

C.     Waiver of the Writing Requirement.................................. 160

V.           CHANGE ORDER AUTHORIZATION.................................. 164

A.     Actual Authority............................................................... 165

B.     Apparent Authority........................................................... 167

C.     Inherent Authority............................................................ 169

D.     Authority by Ratification.................................................. 169

E.      Authority by Estoppel....................................................... 170

VI.        CONCLUSION....................................................................... 170

 

Chapter Seven:

DELAYS............................................................................................ 175

I.              INTRODUCTION................................................................... 175

II.           CONTRACT PERFORMANCE.............................................. 176

III.         DELAY AND ACCELERATION........................................... 176

A.     Delay................................................................................ 176

B.     Acceleration..................................................................... 180

C.     Constructive Acceleration................................................. 181

D.     Contractor-Caused Delay.................................................. 182

E.      Concurrent Delays............................................................ 183

IV.        NO-DAMAGE-FOR-DELAY CLAUSES................................ 184

V.           DELAY DAMAGES AND REMEDIES.................................. 185

A.     Additional Time................................................................ 185

B.     Contractor Damages......................................................... 185

1.      Inefficiencies and Impacts.......................................... 186

2.      Lost Profits................................................................. 187

3.      Indemnification.......................................................... 187

4.      Home Office Overhead/Eichleay

      Damages..................................................................... 187

C.     Calculating Damages........................................................ 188

1.      Total Cost................................................................... 189

2.      Modified Total Cost.................................................... 190

3.      Measured Mile............................................................ 190

4.      Owner Damages......................................................... 191

VI.        CONCLUSION....................................................................... 193

 

Chapter Eight:

DIFFERING SITE CONDITIONS................................................... 197

I.              INTRODUCTION................................................................... 197

II.           TYPE 1 CONDITIONS........................................................... 199

III.         TYPE 2 CONDITIONS........................................................... 200

IV.        COMMON TYPES OF DIFFERING SITE

         CONDITIONS........................................................................ 200

A.     Unforeseen Subsurface Obstructions................................ 200

B.     Subsurface Water or Permafrost

      Conditions........................................................................ 201

C.     Erroneous Contour or Elevation Lines

      Requiring Additional Excavation...................................... 201

D.     Changed or Unknown Underground

      Utilities............................................................................. 201

V.           CONDITIONS NOT TYPICALLY COVERED....................... 202

A.     Non-Physical Conditions.................................................. 202

B.     Abnormal Weather Conditions......................................... 202

C.     Conditions Not in Existence at the Time

      of Contracting................................................................... 202

VI.        RIGHT TO RELY ON OWNER’S PLANS

         AND SPECIFICATIONS........................................................ 202

VII.      CONTRACTOR’S NOTICE REQUIREMENTS...................... 203

VIII.   DUTY TO INVESTIGATE SITE............................................ 204

IX.        A CONTRACT WITHOUT A DIFFERING

         SITE CONDITIONS CLAUSE................................................ 205

X.           CONCLUSION....................................................................... 206