17.4 Owner Defenses
Library | Virginia Construction Law Deskbook (Virginia CLE) (2019 Ed.) |
17.4 OWNER DEFENSES
17.401 Contract Terms That Excuse Performance.
A. Force Majeure. An act of God, also known as force majeure, may excuse delay. An act of God is an occurrence that results from natural causes without human intervention and that could not have been prevented
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by the exercise of reasonable care and foresight. 358 For weather to be characterized as an act of God, thereby excusing delay, it must be unusually severe. Poor weather is an assumed risk, especially when time is of the essence for completion of the project. 359 Other incidents that might be covered by force majeure clauses include flood, sudden death, and illness. 360
B. Impossibility of Performance. Where performance is impossible due to a change in domestic laws, the death or illness of a party whose performance is essential to the contract, or "the fortuitous destruction or change in the character of something to which the contract is related, or which by the terms of the contract was made a necessary means of performance," the promisor can be excused unless the promisor either expressly agreed in the contract to assume the risk of performance, whether possible or not, or the impossibility was due to the promisor's fault. 361 In addition, a supervening condition that renders a promisor's performance only temporarily impossible will not release the promisor from the duty of performing but will only suspend that obligation. 362 Moreover, if one makes a contract to do a thing that is itself possible to do, the promisor will be liable for a breach of contract, notwithstanding the fact that it is beyond the promisor's power to accomplish. 363
C. Mutual Mistake of Fact. If both the owner and the contractor rely upon certain conditions or facts that are assumed to be true and form the basis of the contract, but which later prove to be untrue or nonexistent, the owner is entitled to rescind or cancel the contract and avoid its enforcement. 364 Such mistakes could arise out of assumptions concerning
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subsurface conditions, the cost or availability of labor or materials, 365 zoning or permitting requirements for the project, or similar matters.
D. Accepting Payment. The owner may argue that the contractor's acceptance of payments made during the course of construction bars the contractor from later pursuing claims for additional work or delay damages. 366 The contractor should look for language in payment applications providing that acceptance of a payment constitutes a waiver of any claims that might exist for work performed during the payment application period. Moreover, the contractor should scrupulously follow any contractual requirements for giving notice of claims to avoid reliance by the owner on a waiver defense.
E. First Material Breach. The "first material breach" rule arises from the contract relationship in its entirety rather than from specific terms of the contract. Courts have upheld the doctrine that the party committing the first material breach of a contract will not be allowed to seek enforcement of the contract. 367 The Federal District Court for the Eastern District of Virginia has held that the first material breach rule is applicable to counterclaims as well. 368
F. Lack of Notice. Contract clauses requiring a contractor to give the owner notice of a claim within a specified amount of time from when the claim first became apparent are commonplace in the construction industry. Virginia courts have strictly enforced such requirements and have barred claims in the absence of required notice. 369
17.402 Contract Terms That Transfer or Limit Liability.
A....
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