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Don't Waive Your Right To Complain Just To Get Paid: Bring Up Project Problems Before You Sign

Tuesday, November 04, 2008 04:03 pm

Don't Waive Your Right To Complain Just To Get Paid: Bring Up Project Problems Before You Sign

A subcontractor attempted to make a prime contractor pay for alleged government-caused damages, but ironclad subcontract waivers barred the claim.

During fence installation on a U.S. Navy project, Kenneth Hantman, Inc. (Hantman), encountered an interfering Naval Inspector who, among other things, allegedly verbally assaulted crew members and caused delays. At the project's end, Hantman filed a claim against the government, which the contractor, the Whiting-Turner Contracting Company (Whiting-Turner) sponsored. The claim went nowhere and it was withdrawn. Hantman claimed Whiting- Turner had withdrawn it and sued for breach of contract, attempting to hold the contractor responsible for damages because it "pulled the rug out from under [the subcontractor] in terms of the agreed sponsorship."

Whiting-Turner argued that the contractual releases Hantman had signed during the project barred its claims against the Navy and reasoned that those same releases barred Hantman from claiming recovery from Whiting- Turner for what it could not have recovered from the Navy. The court agreed.

In return for payment under the subcontract, Hantman had to sign partial releases as well as a final release waivingall project-related claims against Whiting-Turner and the Navy. Hantman's only chance to prevail in its contract breach suit was to demonstrate these releases weren't enfo [...]

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