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Contractor Not Responsible For Conditions That 'may Or May Not Occur'

Thursday, September 01, 2011 07:25 am


Differing Site Conditions -- Equitable Adjustment Haymes Brothers, Inc. v. RTI International Metals, Inc., et al, 2011 U.S. Dist. Lexis 65926 (W. D. Va. June 17, 2011)

The amount a contractor sought in equitable adjustment would have resulted in a windfall, according to the court; it cut down the compensation due by more than $1.5 million.

RTI International Metals, Inc. and RTI-Martinsville, Inc. (together, RTI) hired Haymes Brothers, Inc. (Haymes), under a $6-million contract, to perform an excavation project as part of the construction of a titanium manufacturing facility in Henry County, Virginia. Two months into the project, Haymes sought a $2.8-million equitable adjustment after it encountered boulders "of a magnitude that could not be foreseen." The contract allowed for equitable adjustment only where "soils and rock of a type(s) different than those known to [the contractor] are encountered." Thus, the case turned on the meaning of that phrase.

The court found that the word "type" was ambiguous because it could be understood in more than one way--either referring to the composition of rock and soil (i.e., igneous, sedimentary, metamorphic, etc. and various soil classes), or to the structure and quantity (i.e., formations, layout) of the rock and soil beneath the surface, or to both. As a result, the court had to look to the parties' acts and interpretations in executing the contract.

The [...]

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