Construction Law Blog

Construction Law Blog

“Paid-if-Paid” v. “Paid-When-Paid” Clauses

On May 24, 2018, the Court of Appeals of Maryland filed its decision in Young Electrical Contractors, Inc. v. Dustin Construction, Inc. In its decision, the Court of Appeals analyzed a Subcontract under Virginia law to determine whether the payment provisions in the Subcontract were “paid-if-paid” or “paidwhen-paid” provisions. The Circuit Court held that a…

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Subtle but Substantive Differences: Mechanics’ Liens in Maryland, Virginia, and the District of Columbia – Pre-Lien Requirements

Mechanics’ lien are an important tool to unsure payment for general contractors and subcontractors for construction projects; however, because mechanics’ liens are a statutory creation, the requirements to obtain a mechanics’ lien vary by jurisdiction.  In Maryland, Virginia, or Washington D.C., general contractors and subcontractors must understand the different requirements, which include different pre-lien requirements,…

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Maryland’s Non-Licensed Residential Subcontractor Loophole

Maryland subcontractors need to ensure they are in compliance with all regulatory and licensing requirements before performing work on residential buildings or they may be left with nothing to show for it.  Maryland law clearly prohibits a subcontractor from performing work on a residence without a home improvement license and the failure to have a…

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Using the Maryland Construction Trust Statute as a Tool for Payment by Subcontractors

The Maryland Construction Trust statute protects subcontractors from dishonest practices by general and higher tiered subcontractors by making officers, directors, and managing agents personally liable when such agents knowingly use monies held in trust improperly.  A recent case by the Maryland Court of Special Appeals clarified the applicability of the Maryland Construction Trust statute, limiting…

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The Seven-Day Time Limit to File a Bid Protest Begins to Run when the Protestor Knew or Should Have Known a Basis for a Bid Protest

The Maryland State Board of Contract Appeals (“MSBCA”) determined that it did not have jurisdiction to hear the Supplemental Bid-Protest Appeal (the “Protest”) because the protestor did not file the Protest in a timely manner.  That is, the protestor did not file the Protest within seven days’ time, as required by COMAR 21.10.02.03B.  MSBCA stated…

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“Good Faith” Efforts to Include MBE Goals in a Bid

In Turlington Valuation Associates, Inc., MSBCA No. 2959 at 1 (May 11, 2016), the Maryland State Board of Contract Appeals (“MSBCA”) denied the appeal of Turlington Valuation Associates, Inc. (“Turlington”) after Turlington failed to make good faith efforts to meet the Minority Business Enterprise  (“MBE”) goals.  In its appeal, Turlington sought a waiver for the…

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What Does Senate Bill 311 Mean for Architects and Engineers?

On October 1, 2017, Senate Bill 311 (“S.B. 311”) becomes effective.  S.B. 311 repeals Md. Code Ann., State Fin. & Proc. §§ 3-301 et seq., addressing the proposal and bidding process for architectural and engineering services for Maryland State projects, and enacts what will become Md. Code Ann., State Fin. & Proc. §12-112 (“§ 12-112”). …

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Flow Down Provisions: Incorporation by Reference of an Arbitration Provision Does Not Obligate a Surety to Arbitrate

In Schneider Electric Building Critical Systems, Inc. v. Western surety Company, 231 Md. App 27 (2016), the Maryland Court of Special Appeals held that a surety whose bond was incorporated by reference into a subcontract containing an arbitration provision did not obligate itself to arbitrate any claims arising from the construction project.  Schneider Electric Buildings…

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Beware of Pay-If-Paid Clauses: Maryland Court Dismisses Subcontractor’s Delay and Acceleration Claims after Owner Denies Change Orders

The Maryland Court of Appeals upheld the dismissal of a subcontractor’s delay and acceleration claims against a general contractor after the court determined that a pay-if-paid provision existed in the subcontract and the owner refused to remit payment.  The court concluded that, despite directing the subcontractor to accelerate work on the project, the general contractor…

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