Construction & Public Contract Law Section | State Bar of Wisconsin​

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Technology has made drones less expensive and more powerful. Thus, they are more prevalent today, as both a pastime and a key component of some businesses, including those in the construction context.

Federal, state, and local units of government license and regulate Unmanned Aircraft System (UAS) use, and violations can be subject to state and federal civil and criminal penalties.

In Wisconsin, a drone – technically known as an Unmanned Aircraft System or UAS – is generally defined as
Continue Reading Sky is the Limit for Drone Use in Construction

During the COVID-19 pandemic, construction material prices rose substantially and, in some cases, skyrocketed to record high levels.1

Lumber prices reached historic highs in May 2021, with futures prices rising from $423 per thousand board feet as of Jan. 8, 2020, to a $1,607 per thousand board feet on May 10, 2021.2

Although lumber prices have started to fall, prices are still nearly double January 2020 prices. The rise in lumber prices has largely been attributed to
Continue Reading Construction Material Price Increases: Options for Contractual Risk Shifting

A contractor driving piles runs into limestone when the drawings and specifications indicated sand and gravel. The contract calls for an “equitable adjustment” when faced with such a differing site condition, but how is the adjustment determined?

Under Wisconsin law, a hierarchy of methods exist to answer this question. If a contractor does not follow this hierarchy, its claim for an adjustment may be rejected by the owner and ultimately a court as a matter of law.

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Continue Reading Calculating an Equitable Adjustment in Wisconsin for a Differing Site Condition

The hard lesson for contractors in a recent case:1

Do not sign a partial lien waiver for partial payment unless the lien waiver document specifically and expressly limits the waiver to apply to a particular portion of such labor, services, materials, plans, or specifications.

A subcontractor signed a “partial” lien waiver with the prime contractor to get paid $33,000 by the prime, without specifically and expressly limiting the waiver to apply to a particular portion of the $220,000
Continue Reading The Pitfalls of Partial Construction Lien Waivers

The City of Madison’s bird-safe glass ordinance may fly in the face of the state of Wisconsin’s Uniform Commercial Building Code (Uniform Code).

With the goal of streamlining building regulations and keeping costs reasonable without affecting safety or quality, legislation supported by Democrats and Republicans established a Uniform Code in Wisconsin,1 and designates the Wisconsin Department of Safety and Professional Services as the state agency to promulgate and adopt the Uniform Code via the administrative rules process.2
Continue Reading For the Birds, Literally: Madison’s New Construction Ordinance

Wisconsin is currently experiencing a significant shift to renewable energy (RE) for its electricity usage.

Thoughtful regulatory and statutory changes are needed to ensure the full potential of this moment is realized for Wisconsin businesses and residents – not to mention our homegrown contractors whose job trailers we’d prefer to see on these sites.

Warming Up to the Idea

Wisconsin lags the rest of the U.S. in terms of RE electricity production.

In 2019, our statewide RE mix was
Continue Reading Wisconsin is Warming Up to the Idea of Renewable Energy

Small-scale residential construction projects, such as single-family home builds, additions, and remodels, pose unique challenges for Wisconsin attorneys who draft construction contracts.

Wisconsin law protects Wisconsin homeowners from being taken advantage of by contractors, by imposing special requirements on contractors who perform residential home improvement work. Contractors can comply with most of Wisconsin’s technical obligations by drafting robust contracts.

In addition, residential construction projects involve different issues and complications than those that arise on larger commercial construction projects. On
Continue Reading Building a Better Residential Construction Contract

In Part 1, we discussed copyright basics and architectural plans as one asset that could be protected by copyright. See Construction and Copyright, Part 1: Don’t Forget about IP.Here in Part 2, we discuss additional practical copyright considerations, including that designs and architectural works aren’t the only copyrightable material to come out of the construction process.

Photos and Videos

Many construction companies want to promote their business using “before and after” or progress photographs of their work. If
Continue Reading Construction and Copyright, Part 2: Practical Considerations

Construction projects, by their very nature, operate in the world of tangible property.Quite obviously, tradespersons use machinery and tools to fit building materials together to construct physical buildings.

With material goods acting as both the figurative and literal foundation of the industry, construction companies, and by extension, their construction contracts, could easily focus solely on the tangible elements of each project.

Bryan T. Kroes, Marquette 2013, is a senior associate with Hurtado Zimmerman SC, Wauwautosa, where he
Continue Reading Construction and Copyright, Part 1: Don’t Forget about Intellectual Property

Indemnity clauses are common in commercial contracts.

Typically, one party (the indemnitor) agrees to “indemnify, defend, and hold harmless” another party (the indemnitee) from any and all claims or losses, or perhaps certain defined ones.

In the construction context, such a provision may, for example, provide indemnity protection to an owner for any claims, losses, or damages – including attorneys’ fees – arising out of a contractor’s work.1 At its base level, such language protects owners from exposure
Continue Reading Indemnity on Offense

In Loren Imhoff Homebuilder, Inc. v. Taylor and Cuevas,1 the Dist. IV Court of Appeals reversed the circuit court’s vacatur of an arbitration award, based on the circuit court’s conclusion that the arbitrator fell asleep at some point or points during the evidentiary hearing and that, as a result, he “so imperfectly executed his powers that a mutual, final and definite award upon the subject matter submitted was not made.”

The appeals court concluded that the homeowner seeking
Continue Reading Don't Sleep on the Arbitration Forfeiture Standard

The basic purpose of the contracting process is to allocate risks among the various parties.

Many risks are easy to identify and evaluate. For example, a contractor can evaluate the risk of labor cost changes or material prices. Similarly, the owner can evaluate and cover the risk of a contractor’s default by requiring a payment and performance bond.

In contrast to quantifiable risks, the risks presented by unknown conditions (such as subsurface conditions) are difficult to identify and evaluate.
Continue Reading Differing Site Conditions: The Dangers of the Great Unknown

This past summer, the Wisconsin Court of Appeals issued an unpublished opinion in Coolidge A L.L.C. v. City of Waukesha,1 a case involving claims of negligence against both the City of Waukesha (City) and a contractor working for it, D.F. Tomasini Contractors (Tomasini).The Court of Appeals determined that the City was shielded from the negligence claim by governmental immunity, and that Tomasini, as an agent of the City, also was shielded.
The court’s decision reminds construction attorneys, and
Continue Reading Wisconsin Court of Appeals Affirms Contractor’s Immunity as Municipal Government’s Agent

Wis. Stat. section 895.447 has existed in its current form since passage in 1977, without having been subjected to serious judicial scrutiny. The Wisconsin Supreme Court’s recent decision in Rural Mutual Ins. Co. v. Lester Buildings, LLC,1 provides some clarity as to the statute’s intended effect, but also calls into question the enforceability of other common risk transfer and limitation clauses in construction contracts – namely, limitation of liability clauses, waiver of consequential damages clauses, and additional insured requirements.
Continue Reading Risk Transfer and Limitation Clauses in Construction Contracts after Lester Bldgs

The construction lien law is one of the most powerful payment collection tools available to construction contractors.
Yet, while most contractors know it exists, very few know enough about it to use it effectively. All too often, that lack of knowledge results in an unfortunate and unintended loss of valuable legal rights when too much time passes without exercising them. On troubled projects, a construction lien could make the difference between a contractor getting paid and not getting paid.
Continue Reading 101: Wisconsin’s Construction Lien Law

On April 22, 2020, the Court of Appeals District II issued an opinion in the case of Mechanical Inc. v. Venture Electrical Contractors, Inc.1 This case, commenced in 2015, involved one subcontractor suing another for negligence, and is the latest in the line of Wisconsin cases extending the economic loss doctrine into the field of construction law. (The authors were attorneys for Mechanical Inc. throughout these proceedings.)Background
The facts of this dispute are important to a complete understanding
Continue Reading Court of Appeals: Subcontractors Cannot Sue Each Other for Negligence