June 2011 – Construction Law

Prompt Payment Penalties: CA Court of Appeal Relaxes Standard, “Good Faith Dispute” To Be Proven By Objective Evidence

Jun 29 2011

FEI Enters., Inc. v. Kee Man Yoon, 194 Cal. App. 4th 790 (2011)

To encourage general contractors to make timely payments to subcontractors, California Business and Professions Code section 7108.5 requires a general contractor to pay its subcontractors within 10 days of receiving a corresponding progress payment from the project’s owner, unless the parties agree otherwise in writing. If the general contractor fails to do so, the subcontractor may recover a payment penalty. That penalty is fixed at 2% of the amount due per month for every month the payment is not made.

The general contractor, however, may withhold progress payments and avoid the payment penalty if there is a “good faith dispute” over the amount owed. The question is what constitutes a “good faith dispute.” In the recent case of FEI Enters., Inc. v. Kee Man Yoon, 194 Cal. App. 4th 790 (2011), the California Court of Appeal held that a “good faith dispute” exists “where the arguments asserted or positions taken have objective legal tenability.” In other words, the subcontractor does not need to show what a general contractor believed in his or her own mind. The subcontractor only needs to show objective evidence that the general contractor’s actions were unreasonable.

Can Government Contractors Certify That Their Goods and Services “Exist in Productive Harmony” with Nature? New Rule for Federal Green Contracting

Jun 23 2011

By: Lawrence Prosen, Barry Hartman, Nickolas Milonas, K&L Gates, Washington D.C.

Federal Agencies Issue Interim Rule Promoting Sustainability & Green Building

Sustainability and “green building” have continued to gain momentum and visibility. Over the past several years, the Federal Government and its various agencies and administrations have increased the extent to which these goals are embodied in government contracting, ranging from green design outlined in the U.S. Green Building Council’s LEED (Leadership in Energy and Environmental Design) requirements to the use of recycled paper for printers and copiers. This trend has continued to gain prominence through such things as changes in building codes to President Obama’s issuance of Executive Orders on the topic. See Exec. Order No. 13,423; Exec. Order No. 13,514.

On May 31, 2011, the Department of Defense, General Services Administration, and National Aeronautics and Space Administration issued a joint interim rule (the “Rule”) that for the first time directly and specifically incorporates sustainability requirements into the Federal Acquisition Regulation (located at Title 48 of the Code of Federal Regulations). 76 Fed. Reg. 31,395 (May 31, 2011). The Rule took effect immediately and implemented the aforementioned Executive Orders that require Federal agencies to lead by example in conservation and energy efficiency.

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International Commercial Arbitration in Brazil – A Primer

Jun 22 2011

By: Richard F. Paciaroni, K&L Gates, Pittsburgh

Background

Pre-1980 Brazil could rightly be said to have been hostile towards arbitration, clinging to the “Calvo doctrine” which did not permit foreigners any different treatment than Latin American nationals. In the late 1980’s, however, Brazil began to emerge from its shell and take its first steps towards a more modern approach in respect of international arbitration.

The first movement towards modernization was Brazil’s ratification of the Panama Convention in 1995, closely followed by: (1) the adoption, in 1996, of its own national arbitration law, Law No. 9.307, 23 September 1996 (the “Arbitration Act”) and (2) the adoption of the Mercosur Protocol in 1998, all of which set the stage for modern arbitration practice in Brazil. While the new Arbitration Act was enacted in 1996, it took another five years to come into full force due to a constitutional challenge lodged in the Brazilian Supreme Court, which ultimately decided, in December 2001, that the Arbitration Act was constitutional. After 2001, the Brazilian courts have routinely enforced arbitration clauses in commercial contracts, thus bringing Brazil in line with internationally accepted standards. With the ratification of the New York Convention in July 2002, Brazil joined the family of nations who offer a viable legislative and enforcement framework for international arbitration proceedings.

Further adding to the acceptance and visibility of the arbitration practice in Brazil are the actions of the Brazilian Arbitration Committee (“CBAr”) which has taken steps in recent years to promote international arbitration in Brazil by forming relationships with international institutions like the ICC, LCIA and ICDR and by holding major conferences in Brazilian cities, such as the ICCA bi-annual convention which was held in Rio de Janeiro in 2010. What follows is a brief summary of the key points of the Arbitration Act and various court decisions that provide support for international commercial arbitration in Brazil.

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Sales of Goods: Battle of the Forms Under UCC and CISG – A Practical Perspective (Live Audio Conference)

Jun 07 2011

Offered via Webinar by Lorman Education Services

Please join K&L Gates partners Jason L. Richey and Richard F. Paciaroni for this informative seminar on Wednesday, August 10, 2011 at 1:00 p.m. U.S. Eastern Daylight Time. (CLE credit is being provided for this event, where available. See the registration link to the right for more details.)

Session Description
This live audio conference will focus on Standard Terms and Conditions for Sales of Goods, Uniform Commercial Code (UCC) 2-207 “Battle of the Forms,” and a discussion of the UN Convention on the International Sale of Goods (CISG) with an emphasis on the outcome of the Battle of the Forms.

The session will analyze when the UCC and CISG apply to certain transactions. We will then look at “best practices” in use for standard forms for both buyers and sellers, examine some example scenarios and compare and contrast likely outcomes between UCC and CISG controlled contracts. The program will also look at recent legal developments for both the UCC and the CISG.

Registration:
Click here to register and receive a 20% discount. When registering, use priority code 15800 and discount code F2716129.

Archive:June 2011