INTERFERENCE WITH CONTRACTS –ACTIONABLE TORT
Claims for tortious interference with contract may arise with alarming frequency in highly competitive business relationships and transactions. Simply defined, tortious interference is the unlawful act of one person or entity that causes damage or harm to another’s rights, interests, or business. The aggrieved party may recover monetary damages from the wrongdoer, upon the presentation of clear evidence to support such claims.
In one recent action, a corporate officer filed suit against the former employer and shareholders, alleging wrongful discharge and tortious interference with her contract of employment. The trial Court found no wrongful termination and denied the claims of tortious interference. On appeal, the Court of Appeals affirmed in part and reversed in part, remanding the case to the Trial Court for rehearing. Gray-Jones v. Jones (2000) 137 O App3d 93, 100-102.
In interpreting and applying the law, one recent court decision held: “One who intentionally and improperly interferes with another’s prospective contractual relation (except a contract to marry) is subject to liability to the other for the pecuniary harm resulting from loss of the benefits of the relation, whether the interference consists of “(a) inducing or otherwise causing a third person not to enter or continue a prospective relation or (b) preventing the other from acquiring or continuing the prospective relation."
The type of relations protected from interference includes: “any prospective contractual relations *** if the potential contract would be of pecuniary value to the plaintiff.” The prospective contractual relations include “the opportunity of selling or buying land or chattels or services, and any other relations leading to potentially profitable contracts.”
Factors: In determining whether an actor has acted improperly in intentionally interfering with a contract or prospective contract of another, consideration should be given to the following factors: (a) the nature of the actor’s conduct, (b) the actor’s motive, (c) the interests of the other with which the actor’s conduct interferes, (d) the interests sought to be advanced by the actor, (e) the social interests in protecting the freedom of action of the actor and the contractual interests of the other, (f) the proximity or remoteness of the actor’s conduct to the interference, and (g) the relations between the parties.” Fred Siegel Co., L.P.A. v. Arter & Hadden (1999), 85 Ohio St.3d 171, 178-179, Syllabus, para. 3, citing Restatement of the Law 2d, Torts [1979] 26 Section 767.
When the interference was with a prospective contract, the plaintiff is entitled to recover lost profit expected to be made under the contract. Additionally, Ohio law recognizes that a plaintiff may recover all damages proximately caused by an actor’s misconduct in a tortious interference action. Gray-Jones v. Jones (2000) 137 O App3d 93, 100-102.
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I don't care what anybody says about me as long as it isn't true.
Truman Capote (1924-84) U.S. Author
AUTHOR / EDITOR: J. NORMAN STARK is an Attorney-at-Law, a Registered Architect, (AIA, NCARB) Registered Landscape Architect, Interior Designer, Planner and Senior Appraiser (ASA), admitted to practice law before the Bar of Ohio, the US District Courts, Ohio and Illinois (Central Dist.), the US Court of Appeals, and the United States Supreme Court. He has professional training and experience in Business, Construction, Public Works, Litigation, Real Estate and Construction-Legal Project and Crisis Management. His office is in Cleveland, Ohio.
Website: www.Jnormanstark.com
Tuesday, January 13, 2009
CONSTRUCTION COST MANAGEMENT
BUILDING AND RENOVATION COSTS TIME, MONEY, AND EMOTION
Building and renovation projects frequently involve three basic human elements, namely: time, money and emotion. Effective business management of costs, quality and time constraints on building and renovation projects however, also requires attention, experience and professional construction skills, to assure the highest level of attainable goals successfully, and with a minimum of emotion.
Basic techniques employed should include legal principles, budget and time constraints, planning and feasibility studies, programming, development of design criteria, preparation of well-defined construction documents, bid and contract negotiations, and administration of construction contracts through completion and occupancy.
The essential stages of a construction project should include:
1. Feasibility. review zoning, density, site quality, soil bearing values, environmentally “clean” site.
2. Prepare design manual. Consider efficacy of design-build contract.
3. Prepare budget, set time constraints.
4. Interview Architects and Engineers; consider “partnering”.
5. Interview construction managers; consider “partnering”.
6. Review construction designs, correlate budget, authorize document preparation.
7. Advertise for and receive competitive bids, with bid bonds, performance bonds, insurance certificates, etc.
8. Review bids, contractor qualifications, award contracts.
9. Administer contracts, construction, payments; document thoroughly (video).
10. Punch List before beneficial occupancy or final acceptance.
11. Receive guarantees, warrantees, Owner’s Manual.
12. Final payment, conditioned upon lien releases.
Reductions in price may be achieved only with better risk allocation. Punitive damage clauses in construction documents have a corollary; namely, that such clauses will only encourage contractors and suppliers to insulate their bids with higher prices.
Preliminary planning and estimates of cost, time and quality, provide the guidelines as a roadmap for better projects, through controlled and monitored budgets, economic and physical feasibility, better defined project scope, timing, and the initiation of project management. Above all, never assume that the Architect, Engineer, Contractor, Subcontractor, or Supplier will perform services, or supply anything not specifically required and expressly stated in their contracts, whether done gratuitously, or for sums certain !
Certain early warning signs that must be recognized and addressed immediately include: program “creep”, building “footprint” or configuration, exterior materials or cladding, interior finishes, and other methods and materials of construction.
Project delays seriously affect costs and may result in uncontrolled overruns, unless subject to review and control. Hidden costs, “extras”, delays in access to site and storage areas, Owner and/or governmental approvals, etc. are among a few of the other issues seriously affecting final costs, quality and time constraints as well.
Construction project management is business management and administration of highly technical and critical masses comprising the construction process. The guidance of experienced professionals may prove invaluable to an Owner seeking to minimize emotion and to effect delivery of quality projects, on time and within budget.
* * *
AUTHOR: J. NORMAN STARK is an Attorney-at-Law, a Registered Architect, (AIA, NCARB) Registered Landscape Architect, Interior Architectural Designer, and Senior Appraiser (ASA), admitted to practice law before the Bar of Ohio, the US District Courts, Ohio and Illinois (Central Dist.), the US Court of Appeals, and the United States Supreme Court. He has experience as a Mediator, Arbitrator and Litigator in Construction, Business, Public Works, Real Estate and as an Expert Witness. His office is in Cleveland, Ohio and Sarasota, FL.
Building and renovation projects frequently involve three basic human elements, namely: time, money and emotion. Effective business management of costs, quality and time constraints on building and renovation projects however, also requires attention, experience and professional construction skills, to assure the highest level of attainable goals successfully, and with a minimum of emotion.
Basic techniques employed should include legal principles, budget and time constraints, planning and feasibility studies, programming, development of design criteria, preparation of well-defined construction documents, bid and contract negotiations, and administration of construction contracts through completion and occupancy.
The essential stages of a construction project should include:
1. Feasibility. review zoning, density, site quality, soil bearing values, environmentally “clean” site.
2. Prepare design manual. Consider efficacy of design-build contract.
3. Prepare budget, set time constraints.
4. Interview Architects and Engineers; consider “partnering”.
5. Interview construction managers; consider “partnering”.
6. Review construction designs, correlate budget, authorize document preparation.
7. Advertise for and receive competitive bids, with bid bonds, performance bonds, insurance certificates, etc.
8. Review bids, contractor qualifications, award contracts.
9. Administer contracts, construction, payments; document thoroughly (video).
10. Punch List before beneficial occupancy or final acceptance.
11. Receive guarantees, warrantees, Owner’s Manual.
12. Final payment, conditioned upon lien releases.
Reductions in price may be achieved only with better risk allocation. Punitive damage clauses in construction documents have a corollary; namely, that such clauses will only encourage contractors and suppliers to insulate their bids with higher prices.
Preliminary planning and estimates of cost, time and quality, provide the guidelines as a roadmap for better projects, through controlled and monitored budgets, economic and physical feasibility, better defined project scope, timing, and the initiation of project management. Above all, never assume that the Architect, Engineer, Contractor, Subcontractor, or Supplier will perform services, or supply anything not specifically required and expressly stated in their contracts, whether done gratuitously, or for sums certain !
Certain early warning signs that must be recognized and addressed immediately include: program “creep”, building “footprint” or configuration, exterior materials or cladding, interior finishes, and other methods and materials of construction.
Project delays seriously affect costs and may result in uncontrolled overruns, unless subject to review and control. Hidden costs, “extras”, delays in access to site and storage areas, Owner and/or governmental approvals, etc. are among a few of the other issues seriously affecting final costs, quality and time constraints as well.
Construction project management is business management and administration of highly technical and critical masses comprising the construction process. The guidance of experienced professionals may prove invaluable to an Owner seeking to minimize emotion and to effect delivery of quality projects, on time and within budget.
* * *
AUTHOR: J. NORMAN STARK is an Attorney-at-Law, a Registered Architect, (AIA, NCARB) Registered Landscape Architect, Interior Architectural Designer, and Senior Appraiser (ASA), admitted to practice law before the Bar of Ohio, the US District Courts, Ohio and Illinois (Central Dist.), the US Court of Appeals, and the United States Supreme Court. He has experience as a Mediator, Arbitrator and Litigator in Construction, Business, Public Works, Real Estate and as an Expert Witness. His office is in Cleveland, Ohio and Sarasota, FL.
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