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When Owner's Actions Speak Louder Than Words, They May Waive Contract Requirements

Thursday, December 04, 2008 04:36 pm

When Owner's Actions Speak Louder Than Words, They May Waive Contract Requirements

Although a contractor failed to convince a court that contract stipulations were ambiguous, it did manage to show that the owner indirectly waived the words on the page.

Thomas & Marker Construction Company (T&M) contracted with Wal-Mart Stores, Inc. (Wal-Mart) to build a Wal-Mart Supercenter in Springfield, Ohio for a lump sum of $ 9.6 million. That sum included $700,000 for earthwork, such as rock excavation. When T&M encountered rock at higher elevations than shown on the engineer's soil borings report, the contractor submitted a preliminary change order budget (PCOB), as required by the contract for "unforeseen conditions."T&M eventually removed the unforeseen rock, incurring alleged costs of more than $1 million, and submitted a change order requesting payment. After much deliberation, Wal-Mart eventually denied the request on the grounds that the rock removal work T&M completed was included in the bid. At trial, Wal-Mart sought summary judgment on T&M's claims against it, including breaches of the contract and implied warranty of suitabil [...]

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