Construction Law

Owners Owe Implied Obligations During Construction of the Project in Addition to Express Contract Obligations

By John P. Ahlers

Owners and contractors should keep in mind that in addition to the obligations the construction owners assume is part of the express contract terms, there are certain implied obligations that arise during the design and construction of a project.  In many instances, contractors and owners are unaware of these implied obligations: (1)  the duty to disclose material information to prospective bidders; (2) the duty to provide accurate plans and specifications; (3) the duty to provide accurate site information; (4) the duty to perform necessary regulatory approvals, permits and easements; (5) the duty to provide access to the work; (6) duties relating to owner/furnished products, materials or equipment; (7) the duty to timely review contractor submittals and requests; (8) the duty to approve valid requests for extension of time; (9) the duty to make timely inspections; (10) the duty to maintain the project site in a reasonably safe condition; (11) the duty not to hinder, delay or interfere with the timely completion of the work; and (12) the duty to coordinate the work of multiple prime contractors. 

Many of these implied obligations derive from the "Implied Covenant of Good Faith and Fair Dealing" that is imposed on every construction contract.  The Implied Covenant provides: "That neither party will do anything which will injury the right of the other to receive benefits of the agreement."

Both contractors and owners must be mindful of these implied obligations on construction projects.

Full post as published by Construction Law Blog on February 25, 2008 (boomark / email).