Customize Your Payment Clauses … or They’ll Come Back to Haunt You
Session Description:
In today’s tightening financial markets, it’s more important than ever to safeguard your projects from payment issues. This webinar will bring together industry experts to discuss the necessity of customizing payment clauses in construction contracts to protect yourself against partial payments, non-payments, and other financial risks.
Our presenters will delve into real-life nightmare scenarios to illustrate the consequences of poorly drafted payment clauses:
Nightmare #1:
A contractor’s default leads to the Owner’s default. Consequently, the Owner’s lender takes over the Project, and the contractor is left paying the lender’s bill.
Nightmare #2:
A contract is transformed to cost-plus due to significant changes. The Owner withholds part of the payment, citing delays, inefficiencies, and quality issues, and demands a discount as a condition for payment.
Key Takeaways:
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Understanding Payment Clauses:
- Learn about various payment clauses and strategies to mitigate the impact of bankruptcies and insolvencies of Owners and higher-tier contractors.
- Explore the relationship between payment terms and other contract clauses, such as suspension, termination, and proof of owner financing.
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Handling Large Scope Changes:
- Discover strategies to manage the impact of substantial scope changes on cash flow.
- Discuss Cardinal Change concepts, modifications to unit prices, payment cycle adjustments, and risks associated with payment for stored materials.
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Navigating Defaults:
- Gain insights into consent agreement terms and how to handle situations where lenders or sureties take over a project due to an Owner or bonded contractor default.
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Essential Checklist:
- Receive a comprehensive checklist summarizing key payment terms and related clauses to watch for in contracts.
Meet the Presenters
Lauren Catoe
As Assistant General Counsel of AECOM Hunt, Ms. Lauren Catoe is the primary in-house legal point of contact for construction projects run out of AECOM Hunt’s South and West Divisions (through their offices in Dallas, Phoenix, Los Angeles, and San Francisco). Since joining AECOM Hunt in 2018, Ms. Catoe has been assigned to projects such as SoFi Stadium (home of the NFL’s Los Angeles Chargers and Los Angeles Rams), Intuit Dome (future home of the NBA’s Los Angeles Clippers), Moody Center at The University of Texas, and the Terminal 3 Modernization at Phoenix Sky Harbor International Airport. Prior to joining AECOM Hunt, Ms. Catoe was a shareholder in the Tampa office of Carlton Fields, where her practice consisted of advising clients on the planning and development of large-scale, complex construction projects, with a focus on construction transactions. That focus has carried over into her in-house role at AECOM Hunt, as the majority of her time is spent on contract preparation, review, negotiation and administration. Throughout her career, Ms. Catoe has written and spoken on the subject of construction law. Currently, she is editor of The Construction Lawyer, which is the quarterly law journal of the ABA Forum on Construction Law.
Christopher K. Lemieux
Mr. Christopher LeMieux has been a Managing Partner of the firm since its founding in 2018. Mr. LeMieux has practical operational experience where he served as general counsel and an executive committee member for a regional design builder.
During his twenty year career, Mr. LeMieux has represented contractors, architects, engineers, private and public owners, sureties, insurers and subcontractors in litigation, arbitration, claims, disputes and negotiations and drafting of construction contracts for a variety of federal, private, and public projects including design build, P3, integrated project delivery, multifamily, schools, military, stadiums, manufacturing facilities, historic renovations, parking garages, jails, warehouses, car dealerships, condominiums, roads, bridges, drainage, senior living, environmental, chemical plants, waste treatment facilities, pumping stations, oil terminals, marine, FEMA funded projects, mixed use facilities, and residential. In addition, he has represented employers in a wide variety of employment matters including employment training, wage and hour, ADA, FMLA, and Title VII.
Among other acknowledgments, Mr. LeMieux has been recognized by New Orleans Top Lawyers, Best Lawyers in America, and Chambers USA. Mr. LeMieux regularly lectures on construction and employment law to industry groups and associations, such as Louisiana Associated General Contractors, Associated Builders and Contractors of Louisiana, Construction Financial Management Association, National Business Institute, and the Louisiana Bar Association.
Jose Pienknagura
With more than four decades of risk management experience from the client side, Mr. Jose Pienknagura adds unique layers of value to your Gallagher team. Prior to joining Gallagher in 2019, he served as an executive officer, general counsel, bond executive and risk manager for a U.S. National contactor that merged with an international engineering and construction firm. He oversaw the legal, risk management and bond activities for a wide variety of significant projects, including hospitals, professional sports stadiums, arenas, airports, residences, hotels, industrial and automobile facilities, casinos, clean rooms, public private partnership projects, and multiple jail facilities. He negotiated and placed insurance coverage on both enterprise and project-specific accounts for over $15 billion worth of construction, using multiple project delivery methods. Mr. Pienknagura has managed both insurance and bonds claims for jobsite catastrophes, construction and design defects, and subcontractor defaults. He has successfully overseen and managed OCIP, CCIP and Co-CIP insurance programs. He attained $15 billion in Bonding Capacity for AECOM/Hunt prior to joining Gallagher.
A native of Ecuador, Mr. Pienknagura emigrated to the United States to attend Indiana University, where he earned his Bachelor’s, Master’s, and Law Degrees, and is licensed to practice law before the United States Supreme Court. Though Mr. Pienknagura has become a U.S. Citizen, he has retained his ties to South America, Mexico, and Central America. He has negotiated deals in Ecuador, Peru, Chile, Central America, Mexico, Brazil, Argentina, and Colombia. Mr. Pienknagura has served as a frequent guest speaker and writer for the ABA, IRMI, AGC, Construction Super Conference, and multiple other forums on various construction and risk management topics. He is a founding member of The Hartford’s Advisory Board, is a founding member of the AIG Construction Board and while at AECOM, was a member of the Berkshire Hathaway Construction Board.
John Wolf
Mr. John Wolf, President at Peritia Partners, has over 35 years of experience in the development and construction industry. Mr. Wolf held executive-level positions with three Engineering News Record (ENR) Top 100 firms where he had oversight duties, as well as hands-on experience, to assure policy and procedures were in place for the development and maintenance of pro forma estimates, development budgets, construction budgets, prime and subcontract agreements, cost report systems, engineering and construction planning, CPM schedule development, and quality control reporting.
Mr. Wolf regularly conducts risk assessments and advises as to dispute resolution efforts during the pre-development, pre-construction, execution, and post-construction phases of the project lifecycle. He provides analysis and testimony on complex, domestic and international, construction-related projects involving standard of care, constructive and directed changed work, delay, termination, suspension, acceleration, disruption, and productivity issues. Mr. Wolf has evaluated more than 300 projects across 20 countries totaling over $110 billion in both the private and federal sectors and has provided testimony in more than 75 complex construction disputes. Mr. Wolf has qualified and testified as an expert witness in arbitration, international tribunal, and US court formats.
Slide Deck Risk Analysis Checklist Food for Thought