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Welcome back! I hope you enjoyed your Fourth of July.
District Court (and one word) Gives Chicago Cubs a Win
It’s been 106 years since the Chicago Cubs won a World Series title — the longest championship drought of any major American sports team. Luckily for the ball club, their fortunes in the courthouse are brighter.
In April, the Northern District of Illinois decided in favor of the Cubs in a suit involving the renovation of Wrigley Field (the second-oldest stadium in the country). The suit rested on one word in a contract the Cubs had with neighboring businesses, from the following provision:
The Cubs shall not erect windscreens or other barriers to obstruct the views of the Rooftops, provided however that temporary items such as banners, flags, and decorations for special occasions, shall not be considered as having been erected to obstruct views of the Rooftops. Any expansion of Wrigley Field approved by governmental authorities shall not be a violation of this Agreement, including this section.
See if you can guess which word: Read here to see the answer
North American Payment Disputes total $29.6 Million in 2014, Average 16.2 Months
Have you ever had a payment dispute? You’re not alone.
The total value of disputes in North America totaled to $29.6 million in 2014, according to a report from ARCADIS. While that number represents a drop from 2013, it is up 181.9% from 2011. The average length of disputes increased to 16.2 months from 2013 to 2014.
For the second year running, the number one reason for disputes was “Errors and/or omissions in the contract document.” As evidenced by the Chicago Cubs’ contract provision above, clarity is key, and loose ends can come back to bite.
Specific contract language is especially important for those with less leverage, at the bottom of the contracting chain. According to the report, “In Europe and the US, many contracts secured after 2008, when business was scarce, are based on rock bottom prices and feature a significant additional transfer of commercial risk to the supply chain. Projects like these often create the conditions for disputes.”
The North American section is only 2 pages, and worth a glance: View the report for the full picture
What to Look for in Equipment Rental Agreements
Speaking of contract provisions, equipment rental contracts were the topic of conversation at Construction Executive a couple weeks ago.
Alexander Barthet writes specifically about indemnity and “hold harmless” clauses. Typically, the general contractor indemnifies (releases of liability) the owner of losses or damages, and the subcontractor indemnifies the GC, and so on. (This is not much different than the financial risk-shifting that occurs on construction projects.)
Though it may fly in the face of convention, Barthet reminds readers that indemnity provisions are on the negotiating table while drafting contracts. View Barthet’s article for tips with reading and preparing equipment rental contracts.