Fifteen years ago, a contractor was hired by the city to repair a parking garage.As of last fall, the price tag, with interest, for that project stood at $8.3 million. Three years ago, a jury awarded the contractor $7.3 million. A federal appeals court recently reduced that amount to $5.3 million, though it upheld the original verdict.
business contracts were a critical part of this litigation matter, where the contractor alleged the city of Syracuse hired it to repair the garage, and then dramatically expanded the scope of the project and then refused to foot the bill for it.
The verdict, if it is upheld, is the largest ever against the city.
The case, Syracuse v. American Underground Engineering, was first filed more than a dozen years ago, after the business relationship between the two parties soured.
It started when a 630-car garage was given to the city back in 1996 by an insurance firm, after a portion of another garage within the same plaza had suffered collapse. The insurance firm tore down the rest of the structure, but what remained was given to the city.
Then in 1998, the city awarded the contract to repair damages to the still-standing structure to American Underground. The firm was to be paid $5.8 million to remove the corroded steel and deteriorating concrete.
It’s at this point that the stories of both parties diverge. The contractor said the city abruptly changed the scope of the repair work. The new plans called for more concrete removal than what the original specifications had designated. Plus, the contractor alleged when it went to do the work, it realized the drawings and specifications of the project, provided by the city, were inaccurate, and reflected a smaller job. When the contractor requested additional funding from the city to fund the added work, the city balked.
The city, however, alleged that it never called for more work, only for the work to be done in a different way. The contractor, according to the city, simply walked off the job one day, forcing the city to hire another contractor, at a cost of $2 million, to finish the job.
It was the city that originally filed suit against the contractor. However, it was the contractor that ultimately prevailed.
We tend to think of business and employment contracts as being solely for those full-time workers in a company. And it’s certainly true that those documents can potentially be beneficial in those cases.
But they are also important in freelance and contractor work. These agreements can help to specify the exact nature of the work. It clarifies the exact responsibilities and fiscal obligations of each party. Some of the specifics that might be included:
- The duration of the job;
- Specific information about job duties;
- Information regarding employment benefits;
- Grounds for termination of the contract and/or employment;
- A non-compete clause;
- Protection of client lists and trade secrets;
- The company’s ownership of the employee’s work product;
- A method for resolving disputes.
In preparing these agreements, it’s critical to have the help of an experienced contract attorney. A thorough legal review can ensure your rights and interests are protected.