Getting Paid When The Project Stalls Before It Begins
Robert Osier - Rogers Joseph O'Donnell & Phillips
July 7, 2008
With the increasing use of Design/ Build as the project delivery system, the contractor is taking on greater financial risk for the project's up front costs of design and other preconstruction services. The risk will quickly turn into a liability if the project stalls before construction begins due to factors not within the control of the contractor such as lack of project funding. The first line of protection to ensure payment for these up front costs is through the parties' contract. But other traditional methods of ensuring payment of these fees, such as recording a mechanic's lien or serving a stop notice, may not be available to the contractor as demonstrated in the recent decision in D'Orsay International Partners v. Superior Court (Jeffrey Stone, Inc.), (10-29-04) 04 C. D.O.S. 9721 (Cal. App. 2d Dist.).
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