Law

Please see the files attached. It has two examples of the paper needed and it has the instructions to be followed exactly. Please follow the format shown in the instructions. Note: for the Arbitration brief (Outline), please make it 4 pages long and follow the same format in the instructions and the rest pages are the actual paper (case study) and it should be at least (3000 words) ARBITRATION BRIEF OUTLINE I. Introduction: A. Parties: The parties to the contract that are in privity are: 1. Plaintiff: General Contracting Associates “(GCA)” 2. Defendant: Formula One Racing Group “(FORG)” B. Project: The project is located in Chico, California. GCA, a warehouse specialty company brought in from San Mateo County, was hired to perform construction services to build a 400’x200’ one floor storage warehouse for FORG. The warehouse was to be constructed with a slab on grade, steel framing, metal siding, metal roofing, and interior partitions made of gypsum board and sheetrock. The project was also to include a 60’x25’ parking lot and four 4’ loading docks on the west side. Interior of the building was to consist of five offices for management and crew. C. Disputes: During construction, GCA encountered four issues resulting in delays dealing with time, money, and scope of work. The four issues to be reserved in this arbitration are as follows: 1. Site Access Restrictions: Known by FORG, and unknown to GCA, Chico’s indigenous dirt shrew, (a cousin of the ground hog), emerges from below ground every leap year during summer time to mate in prediction of a tragic winter coming ahead. During the time of the dirt shrew’s emergence, no construction of any kind may take place. FORG was forced by the City of Chico to remove all construction equipment, material, and offices that were currently occupying the job site. GCA suffered three costly summer months of delay due to the dirt shrew’s appearance. In addition to the appearance of the shrew, the shrew also mated this year, the sign of the tragic winter coming ahead. The following winter consisted of heavy rains and additional prolonged periods of delay for GCA. FORG refused to compensate GCA additional time for the summer and winter delay. GCA was unable to begin any sufficient construction and was removed from its critical path.GCA was forced into a constructive acceleration in which it was expected to complete the contract on time without reasonable compensation for its time lost. GCA recorded a total loss of 108 days due to the emergence and mating of the dirt shrew. 2. Differing Site Conditions: According to the site reports, the soil that was to be excavated and graded in the area of the parking lot was specified to be one type of soil suitable to be built upon. Upon excavation, GCA revealed that the soil below the area of the designed parking lot did not have sufficient stability to support a parking lot. GCA submitted a request for information “(RFI)” to FORG questioning them what to do. FORG issued a change order informing GCA to compact and stabilize the sub grade soil. FORG’s change order offered compensation for additional costs associated with the stabilization and compaction of the soil. FORG did not however offer additional time. GCA was once again thrown off of its critical path and forced into another constructive acceleration in which they lost an additional 15 days. GCA also suffered additional costs associated with supplementary labor. 3. Loading Docks/Changes: The declining grade of the driveway going into the loading docks was found to have a substantial amount of storm water collection. FORG was dissatisfied with the driveways claiming that any general contractor should recognize that a graded path should consist of a drainage area. FORG demands drainage ditches to reroute the storm water at the expense of GCA’s time and money. GCA claims that it had performed work as per plans and specifications and it should not be responsible for additional work involving draining ditches without a written change order compensating time and money. Retention of Money: FORG claims that GCA is in violation of its specific duty to perform by not complying with the change order. FORG retained a partial amount of the contract sum due to GCA’s refusal to supply services involving construction of drainage ditches without written change orders. 4. Liquidated damages: FORG requested liquidated damages for additional time spent passed the original contract schedule. The project was 66 days overdue. GCA claims that the expected delays were not conveyed to them in the bid documents, Request for Proposal, or the Invitation for Bid. GCA maintains that the delays were Owner Responsible Delays “(ORD)” and Excusable delays “(ED)” in which time and money should have been attributed where appropriate. GCA asserts that FORG failed to disclose known material information to bidders concerning restrictions to the project. GCA contends that the required work would have been completed on time if not for the delays that had occurred. II. Statement of Facts A. Pre Contract: FORG sent out Request for Qualifications to interested bidders on January 1, 2007. GCA attended the mandatory pre-bid site inspection allowing them to bid on the project. GCA reviewed the Plans and Specifications and submitted its qualifications. GCA was deemed qualified on February 1, 2007. FORG then sent out a Request for Proposal with an Invitation for Bid on February 15, 2007. GCA submitted its proposal on March 30, 2007. FORG awarded contract to GCA on April 15, 2007. B. The Contract: The contract signed was an express stipulated sum contract between GCA and FORG. FORG drafted a standard A-101 and A-201 contract which was then signed by GCA on April 20, 2007. The parties to the contract consisted of FORG and GCA with FORG’s architects as an intended third party beneficiary. The contract amount was for eight million dollars ($8,000,000) Fixed Price. The project duration was for 655 working days (approximately 2.5 years) excluding holidays. The contract contained liquidated damages benefitting FORG of eighteen hundred dollars ($1,800) per calendar day. The Prime Contract included: (1) Contract Documents, (2) Scope of Work, (3) Bid Document, (4) Supplementary Conditions, (5) General Provisions, (6) Specifications, (7) Plans, (8) Site Reports, (9) Schedule, (10) Schedule of Values, (11) Geotechnical Report. 1. All documents listed above were included in the Contract documents. 2. The Document with the lower number supersedes the document with the higher number. 3. All changes must be made with a written change order signed by the Owner and Architect. The contractor shall perform all the Work required by the Contract Documents for all labor necessary to produce such construction and all materials and equipment incorporated or to be incorporated in such construction. The Work to be performed under this Contract shall be commenced May 1, 2007 and, subject to authorized adjustments, Substantial Completion shall be achieved not later than November 15, 2009. The owner shall make monthly progress payments on account of the Contract Sum to the Contractor as provided in the Contract Documents. The final payment shall be paid by the Owner to the Contractor when the Work has been completed, the Contract fully performed, and a final Certificate for Payment has been issued by the Contractor. C. Post Contract: FORG issued the Notice to Proceed to GCA on May 1, 2007. GCA began the project by bringing in all necessary material, equipment, and offices onto the jobsite. About one month of construction into the project, May 27, 2007, the city of Chico informed GCA to halt and remove all construction materials and activities because it was occupying the indigenous dirt shrew mating grounds. GCA recognized the cities regulations and evacuated the site for the summer months. GCA filed a Notice of Delay from its critical path to FORG on May 27, 2007, the same day that it was made to vacate the jobsite. FORG replied to GCA’s notice on May 28, 2007 instructing GCA to wait out the summer months. GCA requested additional time on the contract duration stating that the delay was undisclosed and unforeseeable by GCA and therefore an excusable delay. An excusable delay is generally given reasonable time to cover the delay. FORG refused compensation of time and did not agree to extend the final contract date or duration. GCA was not allowed back onto the jobsite until September 1, 2007. GCA reported to FORG a total loss of 90 days attributed to the dirt shrew which also caused GCA to vacate, move, and store its materials and equipment to another location. After the departure of the dirt shrew, winter soon appeared. Winter was long, harsh and consisted of additional delays. What was believed to be due to the heavy rain during winter, upon excavation of the soil for the parking lot, unsuitable soil was uncovered differing materially from what had been reported in the geotechnical report, (one of the documents which had been listed in the Contract Documents). September 4, 2007, the soil was found to be unsuitable for construction on. On September 4, 2007, GCA submitted a RFI to FORG’s engineers. FORG stated that GCA should have planned ahead for the dirt shrew’s arrival and factored the risk into the bid. FORG also told GCA that FORG would not be responsible for the unsuitable soil. Upon further examination of the sub-grade soil, GCA found the soil to contain two different types of soil. The soil consisted of a fine silt and a clayey sand, (a mixture unsuitable to build upon). GCA submitted an additional RFI on September 5, 2007. GCA also filed a notice of delay with the RFI since the work to be performed interfered with its critical path. FORG agreed to pay for the necessary changes and issued the change order offering additional money to pay for the material, new soil, that would replace the soil. The change order was signed and returned to GCA on September 8, 2007. GCA began the additional work on September 9, 2007. The supplementary work was complete by GCA on September 19, 2007. GCA reported a net loss of fifteen days off of its critical path as well as its additional labor costs due to the soil delay. With the project finally moving along, FORG recognized a fault in the driveways that lead to the loading docks. With no drainage pipes, a substantial amount of water collects after each rainfall. While insignificant during summer months, this may become problematic during winter time. FORG demanded the construction of drainage ditches to redirect the flow of water from loading docks. No change order was signed and GCA refused to perform services. FORG threatened to terminate the contract with GCA for breach and refused to pay the monthly payment for December 2007, the month in which GCA constructed the loading docks, unless GCA agreed to perform such work. Due to an immense amount of work to change, GCA refused to perform the work yet again asserting that it has complied with plans and specifications and it would not provide service for any irrational changes without a written and signed change order. III. Analysis: In order for GCA to recover damages it must present proof that it has completed four key elements regarding the case. GCA must prove that: (1) A valid contract existed (2) GCA completed substantial performance as per the contract (3) FORG has provided a Material Breach (4) Quantifiable damages occurred A. The Contract: GCA and FORG entered into a Contract Liability Theory 1, an Express Contract created through language. FORG was not liable to GCA under Contract Liability Theory 3, (Contract Implied in Law/Circumstances), because there was no unjust done by FORG and no unfair enrichment supplied by GCA to FORG. Following the six elements, a valid Express Contract can be shown. The first element of an express contract created through language is Agreement, reached by offer and acceptance. Neither party revoked or rejected offer or acceptance. The offer (proposal) made by GCA to FORG constitutes as an offer. The award of the contract to GCA as the low qualifying bidder acts as an acceptance to GCA’s offer. Each party entered into the contract with the same objective intent and same specific terms through written and oral communication. The second element under this theory is Consideration. Each party must recognize the bargain as having legal value. GCA recognizes payment from FORG as legal value. FORG recognizes GCA’s construction services as legal value. The third element to be checked is Legal Objective. Each party must comply with the state and local laws and codes governing the contract. FORG attained all necessary permits before construction commenced and GCA is a licensed contractor in the State of California. Each party has legal objective and had acted within the law. The fourth element checks to see if the parties in privity are Capable Parties. Parties are capable if they are not incapable, as defined by three circumstances: • Minor: under the age of 18 • Insane: mentally unstable • Involuntarily Intoxicated: party is not voluntarily intoxicated Element five is Assent. Parties show assent by negating five circumstances. Each party willfully signed into the contract and approved of one another. • Mutual Mistake of Material Fact: There were no mutual mistakes made. • Misrepresentation: All facts and contract items were represented correctly. • Duress: Neither party had an unfair advantage by way of threat. • Undue Influence: Neither party had an unfair advantage by way of persuasion. • Unconsionability: There were no unconscionable terms in the contract. The final element to check is Statue of Frauds. The contract is enforceable against both parties as signed by both parties. All six elements required by Contract Liability Theory 1 have been met therefore there is a valid contract between FORG and GCA. B. GCA Performance: GCA acted reasonably in all requests and demands as required by the contract and changes that had occurred during the course of the project. GCA had a Specific Duty to Perform in which it demonstrated and completed in its dealings with FORG. GCA did not demonstrate in any way a Failure to Perform. Given the difficulties provided by FORG, GCA demonstrated not only Substantial Performance but complete performance in which GCA seeks the full Benefit of Bargain. C. FORG Breach: FORG was unreasonable in mostly all of its requests for changes throughout the project. FORG was unwilling to compensate time and money throughout the duration of the project throwing GCA off of its Critical Path. FORG refused to issue a written and signed change order requested by GCA; FORG then retained a partial amount of the stipulated sum and did not pay GCA for one month of work performed. FORG claims that GCA is in breach of contract by failing to complete the project by the project’s contract completion date. Site Restriction: GCA claims that FORG is in breach of contract by not offering compensation for time during time that GCA is restricted to access the site after given NTP. FORG claims that the dirt shrew is a common occurrence in Chico and that even non-local contractors should factor in additional working days in the chance of the shrew showing up and possibly mating that year. GCA argues that FORG has breached an implied warranty of cooperation by disregarding material fact about the coming year. FORG is in breach of contract by failing to disclose this information to potential bidders prior to the bid date. Due to the excusable delay, GCA suffered 108 days. Differing Site Condition “(DSC)”/Acceleration: GCA argues that FORG is in breach of contract by not offering time in the change order for the Type I DSC encountered on the project site. GCA asserts that the condition was a Type 1 DSC in that it was an unknown condition that differed materially from what was reported in the Contract documents. FORG contends once again that the circumstances should have been planned ahead for and that they are not responsible for any delay or money. GCA offers proof that the soil was not solely unstable due to the harsh winter. Due to the additional work performed by GCA, GCA was removed from its critical path and unable to finish the job by the contract completion date. GCA reported having a loss of 15 days. Unilateral Right to Change the Work: FORG asserts that GCA is in breach by not performing services at the request of FORG. FORG states that it has a unilateral right to change the work. GCA claims that it assumes no such responsibility to the faulty driveways because it had performed its work as per plans and specs. Under the Spearin Doctrine, a contractor will not be responsible for the consequences of defects in the plans and specifications. GCA refutes the claim by stating that any changes in work must be formal under a written change order signed by both the owner and the architect which FORG neglected to do. Retention of Money: GCA claims that FORG is in breach by retaining money for services performed on the loading docks. GCA performed work as per plans and specs and did no such further work without a written change order. FORG unrightfully retained a partial amount of the contract sum for GCA’s presumed failure to perform. Contract Duration/Liquidated Damages: FORG claimed that GCA had breached the contract since GCA exceeded the contract duration by 66 days. GCA refutes this claim stating that consistent problems in dealing with FORG had caused them to exceed the contract duration. GCA contends that it would have completed the contract on time if not for the delays and difficulties undisclosed by FORG. D. Damages: GCA suffered damages on a total of four instances. FORG claims to be entitled to liquidation damages for GCA exceeding the contract duration. Site Restriction Damages: GCA reports having a loss of 90 days over the summer period in which they could not work due to the dirt shrew. GCA also reports having an excess of 18 working days in which the extreme weathers would not allow them to work. During the summer months, GCA suffers additional mobility damages in which they were forced to evacuate their job site and move and store job trailers and other equipment for the three months. The total loss of the 108 days has caused GCA to surpass the contract duration; consequently, they have suffered liquidated damages of 66 days resulting in one hundred thousand and eighteen dollars ($118,800). Total damages for moving in and out of the jobsite totaled up to eighty thousand dollars ($80,000). These damages are caused by the owner’s neglect and disregard during the pre-construction phase. GCA seeks benefit of bargain for jobsite mobility and site access restriction. Differing Site Condition Damages: GCA reports having lost 15 days due to additional work provided for the Type 1 DSC. GCA requests 15 extra days to be added on the contract duration. GCA seeks reimbursement from liquidated damages. Retention of Money: GCA requests damages from FORG for partial retention of money on the contract. FORG withholds a total of $100,000 for the month of December 2007 since GCA refused to reconstruct the loading docks. GCA requests actual damages for the month of December 2007 claiming that they were not in breach. GCA suffered $69,607.60 in actual direct damages involving labor, material, equipment and other service. GCA also suffered $30,392.40 in home office overhead for this month also. The calculation for home office overhead was calculated by GCA’s professional accountant using the Eichleay Formula in Exhibit A on page 14. Liquidated Damages: FORG charged GCA liquidated damages of $118,800 at $1800/day for 66 days. GCA requests that these liquidated damages be withdrawn a on the basis of the previous damages. GCA argues that it would have completed the project within the given project duration if not for the ORD and ED that had occurred on its critical path. IV) Conclusion: FORG and GCA will reach a conclusion through binding arbitration, an alternative dispute resolution as specified in the contract. GCA has encountered four disputes with FORG which had cost GCA additional time and money on the project. GCA was forced into a constructive acceleration on two occasions in which FORG was unreasonable in any accommodation for additional time.. GCA supplied FORG with notices for each delay as well as RFI’s in attempt to keep the project moving along. GCA also suffered actual damages in which it was forced by the city of Chico to abandon its jobsite due to a site restriction. FORG in some cases did not even acknowledge the delays and changes that needed to be made; moreover, it attempted to shift the responsibility to GCA by refusing to sign one change order. FORG accused GCA of breach for refusing to perform additional work not authorized by the FORG, owner and architect. GCA was eventually charged 66 days of liquidation damages. GCA also suffered a one month loss of payment because FORG would not pay them for the month in which GCA refused to perform additional work without an unsigned change order. GCA had acted in good faith in its dealings with FORG and tried to accommodate to FORG’s needs with as few setbacks as possible. In conclusion, the people at FORG will most likely be required to accommodate GCA with well deserved time and money. FORG may even be required to take a semester long class of Legal Aspects of Construction taught by Jon Schwarz at California State University Chico. Exhibit A: Eichleay Formula Step 1: Total Contract Billings Total Company Billings Total Home Office Overhead x = The Project’s Allocable Overhead Step 2: The Project’s Allocable Overhead Number of Days in the Contract Period = Daily Overhead Rate for Subject Contract Step 3: Daily Overhead Rate x Number of Delay Days = Indirect Costs Caused by Delay for Subject Matter Eichleay Formula applied to this arbitration Step 1: $2,000,000 $16,000,000 $2,000,000 x = $250,000 Step 2: $250,000 255 days = $980.40/day