Construction Law
Legal issues in construction projects, including mechanic's liens, bonding, defects, and the Miller Act.
Overview
Construction law governs the legal relationships and disputes arising from the planning, design, and construction of buildings and infrastructure. It encompasses contract formation (including standard form contracts from the AIA and ConsensusDocs), project delivery methods (design-bid-build, design-build, construction management), payment disputes, defect claims, insurance, and dispute resolution.
The Miller Act requires performance and payment bonds on federal construction projects exceeding $150,000, providing subcontractors and suppliers with a remedy for nonpayment since they cannot file liens against federal property. Most states have enacted 'Little Miller Acts' imposing similar bonding requirements on state public works projects. Mechanic's lien statutes, which vary dramatically by state, provide private project participants with a security interest in the improved property as a remedy for nonpayment.
Construction defect litigation involves claims based on breach of contract, breach of warranty, negligence, and strict liability. Statutes of repose, which limit the time period within which construction defect claims can be brought regardless of when the defect is discovered, exist in most states and typically range from 6 to 12 years. Prompt payment statutes at both the federal (Prompt Payment Act) and state level require timely payment to contractors and subcontractors.
Key Statutes
| Statute | Citation | Summary |
|---|---|---|
| Miller Act | 40 U.S.C. §§ 3131–3134 | Requires performance and payment bonds on federal construction contracts exceeding $150,000, protecting subcontractors and material suppliers. |
| Prompt Payment Act | 31 U.S.C. §§ 3901–3907 | Requires federal agencies to pay contractors within specified time frames and pay interest on late payments. |
| Contract Disputes Act | 41 U.S.C. §§ 7101–7109 | Establishes the procedure for resolving contract disputes between the federal government and contractors, including the claims process and appeal rights. |
| Davis-Bacon Act | 40 U.S.C. §§ 3141–3148 | Requires contractors on federally funded construction projects to pay prevailing local wages and fringe benefits to laborers and mechanics. |
Key Cases
United States v. Spearin
248 U.S. 132 (1918)
Established the Spearin Doctrine: when the government provides design specifications, it impliedly warrants their adequacy, shifting design defect liability to the government.
J.A. Jones Construction Co. v. Lehrer McGovern Bovis, Inc.
89 P.3d 1009 (Nev. 2004)
Addressed the economic loss doctrine in construction defect cases, limiting tort recovery to cases involving personal injury or damage to other property.
United States ex rel. Sherman v. Carter
353 U.S. 210 (1957)
Held that the Miller Act should be liberally construed to protect subcontractors and suppliers who cannot obtain mechanic's liens on federal property.
Stolt-Nielsen S.A. v. AnimalFeeds International Corp.
559 U.S. 662 (2010)
Held that a party may not be compelled to submit to class arbitration absent an agreement to do so, significantly impacting construction arbitration clauses.
Key Regulations
Federal Acquisition Regulation (FAR) — Construction Provisions
GSA/DoD/NASA (48 CFR Parts 36, 52)
Federal procurement rules specific to construction contracts, including bonding, inspection, changes, and differing site conditions clauses.
OSHA Construction Safety Standards
OSHA (29 CFR Part 1926)
Occupational safety and health standards for the construction industry, covering fall protection, scaffolding, excavation, and hazard communication.
Davis-Bacon Wage Determinations
Department of Labor
Prevailing wage and fringe benefit rates for various construction classifications, updated periodically for each locality.
Common Issues
- Mechanic's lien perfection and enforcement
- Payment bond claims under the Miller Act and state Little Miller Acts
- Construction defect claims and statute of repose deadlines
- Delay claims (excusable, compensable, and concurrent delay)
- Change order disputes and constructive changes
- Differing site conditions and unforeseen subsurface issues
- Prevailing wage and Davis-Bacon Act compliance
- Indemnity and additional insured issues in construction contracts
State Variations
Mechanic's lien statutes vary dramatically by state in terms of who is eligible, notice requirements, filing deadlines, and enforcement procedures. Some states require preliminary notices within 20 days of first furnishing labor or materials, while others have no preliminary notice requirement. Statutes of repose for construction defects range from 4 to 15 years. Right-to-repair statutes in many states require homeowners to provide notice and an opportunity to repair before filing construction defect lawsuits. State prompt payment acts impose varying penalties for late payment, ranging from statutory interest to attorney's fees. Licensing requirements for contractors differ significantly in scope and enforcement.
Resources
American Institute of Architects (AIA) Contract Documents
Industry-standard contract forms and agreements used in construction projects, including the A201 General Conditions.
American Bar Association Forum on Construction Law
Professional forum offering publications, educational programs, and resources for construction law practitioners.