An Administrator's Guide to California Private School Law

Chapter 17 – Construction

surety requires a takeover agreement, a prime contractor may attempt to seek damages against a school for lost future profits due to its potentially impaired bonding capacity. To avoid these risks, schools should exercise care and consult with legal counsel before contacting a prime contractor’s surety regarding problems on a construction project. Any agreement for a surety to take over a project should require the surety to take the following actions: (1) take over the project; (2) manage the project at the original contract price; (3) at the school’s option, the surety can use the original contractor, hire a new contractor, or use any method the school deems expedient; and (4) obtain assignment of all subcontracts and ensure related warranties will apply to work on the project.

A NTICIPATING A ND P REPARING F OR L ITIGATION

Section 10

A. D OCUMENTATION Throughout the project, school staff should document relevant incidents and facts. This includes the following:  Write timely, effective memoranda to files, which should include the following information:  Date;  Names of conversation or meeting participants;

 Messages sent to other participant;  Other participant’s response; and  Follow-up actions expected.  Take plenty of pictures, using a camera that produces date-stamped pictures.  Write letters confirming oral assurances and communications.  When sending a demand letter, be explicit in explaining problems.  Keep all contract documents, plans, specifications, requests for information, change orders, and all other project documents in an organized manner so specific documents can be readily accessible.

B. C ONTRACTOR D ISPUTES A school’s understanding of which claims resolution process controls is critical to determining how to proceed with a contractor. Contract documents almost always outline a dispute resolution process. Contractors will need to exhaust the dispute resolution processes before filing suit against a school, other than to enforce a mechanics lien. A mediation clause may encourage the parties to try to settle the matter informally prior to pursuing an action in a court of law. Some contracts also require the parties to submit a dispute to binding arbitration if the

An Administrator’s Guide to California Private School Law ©2019 Liebert Cassidy Whitmore 588