The Notice of Non-Responsibility: Only Limited Protection from Contractor, Subcontractor or Supplier Mechanics Lien Claims
The Notice of Non-Responsibility: Only Limited Protection from Contractor, Subcontractor or Supplier Mechanics Lien Claims In California, a powerful legal … Continued
It is an all-too-common scenario in California construction: Nine and a half years after completion of a major California construction project, immediately before the 10-year “statute of repose” for suing on “latent” construction defects expires, a lawsuit claiming damages for “recently discovered” latent construction defects is filed. The property owner sues the contractor for the alleged defects. The direct contractor sues all its subcontractors for indemnity and defense. The attorneys spontaneously generate. Experts proliferate. Claimed defects are extrapolated. Four or five years later, after a few dozen attorneys earn a small fortune in fees, the insurance companies make payments. Attorneys collect more fees. The owners take what remains. They repair nothing… and buy vacation homes.
Certain phrases in our language originated as legal concepts. “Ready, willing and able” and “acts of God” are examples. Another such phrase is “Time is of the essence.” What is the legal significance of including this phrase in a contract?
For many years the prevalence of the “Type 1” indemnity clause has been the subject of fierce debate within the construction industry. Subcontractors have complained that they are saddled with indemnity obligations that require them to indemnify contractors from construction-related claims for which these subcontractors are truly not responsible. In defense, contractors have argued that they must be entitled to the freedom to set contractual terms to best protect themselves and they point out that subcontractors are certainly free to negotiate better terms or turn down work.