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Holy Toledo! Claims Waived Under Article 8

In a February 2, 2016 decision, the Tenth District Court of Appeals in Franklin County affirmed the Court of Claims and upheld the decision to deny an electrical contractor’s claims against the University of Toledo because they were not timely asserted.

This ruling sends another important message to contractors that you must provide both timely notice and substantiation of your claims or they will be waived.

Article 8 of the State of Ohio General Conditions sets forth the requirements for submitting and substantiating a claim:

  1. claims accrue on the date of the occurrence of the event giving rise to the claim;
  2. within 10 days after the claim accrues, the contractor must provide written notice to the contracting authority and architect/engineer;
  3. within 30 days after initiating a claim the contractor must provide 4 copies of supporting documentation to substantiate the claim;
  4. within 30 days after initiating the claim the contractor must certify the claim by providing a notarized statement verifying the accuracy, completeness, fairness and reasonableness of the claim and claim amount; and
  5. failure to timely comply with requirements 2, 3 or 4 above will constitute an “irrevocable waiver” of any related claim.

Despite the contractor’s arguments of substantial compliance, owner-caused delays, contractor inability to calculate the precise amount of its damages and futility of administrative remedies, the Court of Claims and Court of Appeals strictly interpreted the contractual notice provisions and held that the electrical contractor had irrevocably waived its claim as a matter of law. Relief in the form of unjust enrichment was also denied. Holy Toledo! That hurts Batman! POW!

Lessons learned:

  1. understand and follow dispute resolution requirement in your construction contract;
  2. obtain assistance from legal counsel, risk management or a claims consultant to prepare and deliver a timely, properly documented and certified claim;
  3. failure to strictly comply with the contract requirements can be costly and painful; and
  4. be proactive, not reactive.

Should you wish to consult with the author of this article, please feel free to contact Attorney Robert A. Hager at (330) 253-4925.

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