By D. Ryan McCabe
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This article was contributed by R. Bryan Barnes of my law firm.
The State of South Carolina launched into uncharted territory when it disallowed the bid protest of the second low bidder in the case of Martin Engineering, Inc. v. Lexington School District One, 365 S.C. 1, 615 S.E.2d 110 (2005). The school district put a school renovation project out for bid. Sharpe Construction was the low bidder and Martin Engineering was second. When the bids were opened, Sharpe Construction asked to add $613,000 to it $16,000,000 bid saying that it had forgotten to include the built-up roofing.
Martin Engineering protested saying that the school district procurement policy only allowed bid correction when the mistake was clearly evident from the face of the bid, the correction does not cause the bidder to have the low bid, and it would not be prejudicial to fair competition.
The South Carolina Supreme Court found that the mistake was not apparent from the face of the bid but said, "the mistake is clear and the amount Sharpe Construction intended to bid for the roof is evident, by examing the roofing sub's sub-bid...." Furthermore, the Supreme Court found that allowing the upward correction was not prejudicial to fair competition.
The contrary view is that allowing the after the fact upward correction encourages unscrupulous contractors to play games with the bidding process. A contractor can deliberately leave out 10% of his price, as was the case in Martin Engineering, become the low bidder and then ask to correct saying that it is obvious he made a mistake. Then he can have his cake and eat it too. Such gamesmanship is almost impossible to prevent in the bid protest arena where there is no discovery and the case must usually be made in ten days or less.
Click here to read the case. |
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On March 19, 2008 the Federal Communications Commission (FCC) voted unanimously to issue an order banning exclusivity contracts between cable operators (and other multi-channel video programming distributors) and multiple dwelling unit developments. The definition of multiple dwelling units developments includes condominiums, cooperatives, and single-family residential communities. This action by the FCC is consistent with its position that communication providers (internet, wireless and cable) should be subject to the greatest possible competition in providing their services, and that consumers generally benefit from that competition.
If your HOA, POA, condominium association, or cooperative has an exclusivity clause in your cable or video programming distribution contract, this ban will not necessarily terminate the contract, but it may make certain the exclusivity provisions of that agreement unenforceable. The benefit of an exclusivity provision in the contract is that it generally permitted a community association to obtain a better rate for the cable/video programming services, installation of fiber optics, cabling, etc. Without an exclusivity clause, however, most cable operators will probably eliminate discounts extended to community associations unless they employ creative incentives such as providing the discount if a minimum number of residents of a community enter into contracts with the provider.
Click here to view a copy of the media release published by the FCC.
Links on the FCC order:
Benton Foundation article
National Multi Housing Council article
This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter. |
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In Chassereau v. Global-Sun Pools, 644 S.E.2d 718 (S.C. 2007),a buyer and seller entered into a contract for the purchase of a swimming pool. The contract contained an agreement to arbitrate any disputes arising out of the contract. The buyer encountered some problems with the pool which the seller refused to correct. Upon this refusal to correct, the buyer simply stopped making the payments on the pool as set out in the contract. After the buyer refused to make payments on the pool, the seller began harassing the buyer by making false defamatory statements about the buyer and also disclosing the buyer’s personal information.
The buyer subsequently sued the seller for intentional infliction of emotional distress, defamation, and violation of S.C. Code Ann. §16-17-430 (unlawful communication). The seller moved to compel arbitration as was stated in the contract. Both the trial court and the South Carolina Court of Appeals ruled that the motion to compel arbitration be denied. The South Carolina Supreme Court affirmed the lower courts’ decision based on the buyer’s inability to foresee the seller’s actions associated with the tort of outrage. This reasoning along with the similar very recent South Carolina Supreme Court ruling in Aiken v. World Fin. Corp. of S.C., 644 S.E.2d 705 (S.C. 2007), led the court rule in favor of the buyer by rejecting the motion to compel arbitration. The court wrote that when "...uncivilized acts ... arise in the course of performance of contracts containing arbitration clauses, South Carolina courts will not interpret arbitration clauses to apply to such acts which are outrageous and unforeseen."
The court quoted the following language from its opinion in the Aiken case which summarizes the rule applied in this case: "Because even the most broadly-worded arbitration agreements still have limits founded in general principles of contract law, this Court will refuse to interpret any arbitration agreement as applying to outrageous torts that are unforeseeable to a reasonable consumer in the context of normal business dealings.
This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter. |
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The SSA announced that it will not issue any "no-match letters" in 2007 as a result of a court challenge to the rule. The SSA has indicated that it will resume issuing "no-match letters" in 2008.
This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter. |
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On November 15, 2007, OSHA issued a new final rule requiring employers to pay for all safety equipment costs. The new rule goes into effect February 13, 2008 and full compliance is required by May 18, 2008.
Click here to read the final rule.
This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter. |
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In Concerned Dunes West Residents, Inc. v. Georgia-Pacific Corporation, 349 S.C. 251, 562 S.E.2d 633 (2002),the South Carolina Supreme Court held that a developer has a duty to ensure that the roads and other common areas are in good repair at the time ownership of the common areas are transferred to a property owner’s association or to provide the association with sufficient funds to bring those common areas up to standard as of the date of the transfer. The court also held that the developer was responsible for making up all shortfalls in the POA’s operating budget up to an amount tqual to the assessments which would have been generated by property owned by the developer during the period that the developer exerted de facto control over the POA.
The basis for the decision in Dunes West derives from a Court of Appeals decision from 1993. In Goddard v. Fairways Dev. Gen. Partnership, 310 S.C. 408, 426 S.E.2d 828 (Ct. App. 1993), the court held "that the developer of a planned unit development owes a fiduciary duty to the property owners association and its members, much like that owed by promoters of a corporation to investors." The Supreme Court in Dunes West found that both developers and promoters "are entrusted by interested investors to bring about a viable organization to serve a specific function." Dunes West, at 257, 562 S.E.2d at 636. The court also found that "[b]oth should be expected to use good judgment and act in utmost good faith to complete the formation of their organizations."
In conclusion, these decisions from South Carolina’s court show that a developer has a fiduciary duty to the property owners association and its members. The developer will be responsible for transferring roads and common areas in good condition or to provide the association with sufficient funds to bring them up to standards by the date of transfer. A developer who breaches this duty will be liable to the association "for all damages proximately flowing from the breach, including damages for the continued deterioration of these areas."
This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter. |
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20 construction associations collaborated to create a new series of form construction contract documents. The Associated General
Contractors (AGC) and Construction Owners Association of America (COAA) are folding their form contract documents into the new ConsensusDOCS form contract documents. All participating associations, representing various
segments of the construction industry, were allowed to participate in the drafting and all parties had a "full vote in deciding final contract terms."
It will be interesting to see if these documents will be accepted in the construction industry. I surmise that it will ... |
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The statute of limitations for a breach of a subcontract is three years. See S.C. Code Ann. § 15-3-530. However, subcontracts—contracts executed usually between general contractors and subcontractors—can
become subject to a six year statute of limitations under the Uniform Commercial Code (UCC) if a court deems the subcontract to be for a sale of goods as opposed to a service contract. SeeS.C. Code Ann. § 36-2-725.
It is not always easy to establish a clear distinction between a subcontract for the sale of goods ... |
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After filing a mechanic’s lien, a party has
six months to commence a suit to enforce the lien. See
S.C. Code Ann. §
29-5-120. Failure
to enforce a lien within the six month statutory period deprives
the party of the remedies available under the mechanic’s lien
statutes. When faced with a mechanic’s lien, the property owner can
post a bond, which discharges the lien and allows the owner to
convey the property free and clear of the lien despite the
existence of an enforcement ...
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