Showing posts with label fairfax va lawyer. Show all posts
Showing posts with label fairfax va lawyer. Show all posts
Thursday, May 28, 2009
Legal News Sources
Not sure how to keep up to date on legal matters pertinent to you or your company? Gross & Romanick has a number of publications available to help you keep abreast of the ever changing legal arena in Virginia: sign up for our Legal Fax, a compilation of short articles; request a seminar on a legal topic hosted at your company; subscribe to our Legal Newsletter, which covers Virginia Business Law; or subscribe to our Medical Legal Newsletter, which covers issues pertinent to processing personal injury cases or medical office collections. Find out how to sign up for any one of these publications—or to request a seminar—by filling out Gross & Romanick’s online information request form. And, of course you can always call us at 703-273-1400.
Monday, November 10, 2008
Construction Law: Performance Bonds
Companies in the construction industry should understand performance bonds. Performance bonds differ in many ways from payment bonds. While payment bonds are designed to assure compensation to subcontractors and suppliers, performance bonds seek to secure completion of the project or award of damages to the owner for default by the general contractor.
Performance Bonds Defined
The parties to a performance bond consist of the following: (1) the principal (usually the general contractor), (2) the obligee (the owner), and (3) the surety. In some cases, a performance bond is required of a subcontractor, in which case the principal is the subcontractor and the obligee is the general contractor. Performance bonds are primarily designed to afford significant protection to the owner, while subcontractors and suppliers typically have no rights under such bonds.
Claims are brought by the obligee, when the principal has defaulted on its contract with the obligee - the obligee declares the principal to be in default and notifies the surety. Only then is surety required to act, since premature actions by the surety can result in litigation with the principal.
Actions upon Default
In the event of default by the principal, the surety has several options. It can permit the owner to finish the project and compensate the owner for damages. Or, the surety can finish the project through a new contractor. Or, it can finance the general contractor so the defaulting obligee can complete the contract. The choice depends upon the situation and the players.
Statute of Limitations
While the federal Miller Act states no specific time period within which suit must be brought against a surety, there are federal, state and local time limitations applicable to performance bonds. Virginia Code Section 11-59 requires actions against sureties on performance bonds be filed within one year after completion of the contract, including the expiration of all warranties and guarantees. If the action is for a breach of warranty or defect, then all cases must be filed within one year of discovery of the defect or breach of warranty.
Conclusion
In conclusion, individuals in the construction industry should keep in mind that the rules and principles, which govern the operation of these bonds, are sometimes peculiar to the bonds themselves and the statutes under which they are provided. Therefore, it is important to have a good understanding of the terms of your bond, any applicable statutes, your contract and the facts.
This brief article is only meant to provide a very broad overview of the complex area involving payment bonds and cannot be relied upon as a substitute for legal advise. Contact Gross & Romanick by filling out out online form, emailing us at law@gross.com, or calling (703) 273-1400 if you need information about your specific situation.
Performance Bonds Defined
The parties to a performance bond consist of the following: (1) the principal (usually the general contractor), (2) the obligee (the owner), and (3) the surety. In some cases, a performance bond is required of a subcontractor, in which case the principal is the subcontractor and the obligee is the general contractor. Performance bonds are primarily designed to afford significant protection to the owner, while subcontractors and suppliers typically have no rights under such bonds.
Claims are brought by the obligee, when the principal has defaulted on its contract with the obligee - the obligee declares the principal to be in default and notifies the surety. Only then is surety required to act, since premature actions by the surety can result in litigation with the principal.
Actions upon Default
In the event of default by the principal, the surety has several options. It can permit the owner to finish the project and compensate the owner for damages. Or, the surety can finish the project through a new contractor. Or, it can finance the general contractor so the defaulting obligee can complete the contract. The choice depends upon the situation and the players.
Statute of Limitations
While the federal Miller Act states no specific time period within which suit must be brought against a surety, there are federal, state and local time limitations applicable to performance bonds. Virginia Code Section 11-59 requires actions against sureties on performance bonds be filed within one year after completion of the contract, including the expiration of all warranties and guarantees. If the action is for a breach of warranty or defect, then all cases must be filed within one year of discovery of the defect or breach of warranty.
Conclusion
In conclusion, individuals in the construction industry should keep in mind that the rules and principles, which govern the operation of these bonds, are sometimes peculiar to the bonds themselves and the statutes under which they are provided. Therefore, it is important to have a good understanding of the terms of your bond, any applicable statutes, your contract and the facts.
This brief article is only meant to provide a very broad overview of the complex area involving payment bonds and cannot be relied upon as a substitute for legal advise. Contact Gross & Romanick by filling out out online form, emailing us at law@gross.com, or calling (703) 273-1400 if you need information about your specific situation.
Thursday, October 30, 2008
The Soldiers' & Sailors' Civil Relief Act
While dodging bullets around the world, creditors may be conducting a rear assault on our military personnel's assets at home. The Congress came to the rescue in 1918 with the Soldiers' & Sailors' Civil Relief Act, which was amended in 1940 during the Second World War.
The Act is intended to provide unbothered personal serenity and security in order to promote military efficiency; and to assure that soldiers and sailors are not materially disadvantaged in prosecuting or defending legal actions. Judges can stay a legal proceeding if a serviceperson's ability to prosecute and defend an action is impaired by active duty. (So far no judge has enforced a stay to promote military efficiency)
The Act specifically provides relief in matters of rental and installment contacts, foreclosures and termination of insurance. In addition, maximum rates of interest (including service charges, renewal charges, fees, etc.) are set. Even divorce and annulment cases have been suspended.
A 1993 U.S. Supreme Court case demonstrates the problems the Act can cause. In Conroy v. Aniskoff, a property was sold by tax foreclosure, but the Court held that all statute of limitations are suspended. Since the right of redemption continues until active service is terminated, a member of the armed forces could show up years after the sale and demand to redeem the property.
The Conroy case may apply to ordinary foreclosures. And, failure to comply with this provision of the Act can result in imprisonment for one year and/or a fine. Help ... Congress!
*** For more information about the Soldiers' & Sailors' Civil Relief Act or to seek legal counsel for pending litigation, please contact Gross & Romanick by filling out their online form, emailing law@gross.com, or calling 703-273-1400.
The Act is intended to provide unbothered personal serenity and security in order to promote military efficiency; and to assure that soldiers and sailors are not materially disadvantaged in prosecuting or defending legal actions. Judges can stay a legal proceeding if a serviceperson's ability to prosecute and defend an action is impaired by active duty. (So far no judge has enforced a stay to promote military efficiency)
The Act specifically provides relief in matters of rental and installment contacts, foreclosures and termination of insurance. In addition, maximum rates of interest (including service charges, renewal charges, fees, etc.) are set. Even divorce and annulment cases have been suspended.
A 1993 U.S. Supreme Court case demonstrates the problems the Act can cause. In Conroy v. Aniskoff, a property was sold by tax foreclosure, but the Court held that all statute of limitations are suspended. Since the right of redemption continues until active service is terminated, a member of the armed forces could show up years after the sale and demand to redeem the property.
The Conroy case may apply to ordinary foreclosures. And, failure to comply with this provision of the Act can result in imprisonment for one year and/or a fine. Help ... Congress!
*** For more information about the Soldiers' & Sailors' Civil Relief Act or to seek legal counsel for pending litigation, please contact Gross & Romanick by filling out their online form, emailing law@gross.com, or calling 703-273-1400.
Friday, October 10, 2008
Prebankruptcy Provisions: Should you include them in your contracts?
As part of its Business Law practice, Gross & Romanick is dedicated to educating its clients; this information, however, is in not intended to replace legal counsel. If you need legal representation, please contact Gross & Romanick today by visiting their website or by calling 703-273-1400.
Creditors and lending institutions have recently been including various provisions in their contracts and credit agreements, which contemplate what will happen in the event of a bankruptcy. The provisions can be divided into three basic categories: (1) Waivers; (2) Covenants; and, (3) Representations/Admissions.
Waivers limit a borrower's right to either file a bankruptcy petition or to oppose the creditor's lifting of the automatic stay. Covenants provide for immediate relief from the automatic stay or consent not to contest a lift stay motion. Representations/Admissions include provisions in the agreement which admit the elements necessary for the creditor to lift the automatic stay, admit that any future bankruptcy filing will be made in bad faith to hinder or delay the creditor and admissions that security interests are properly perfected.
The prebankruptcy waivers provide a comfort level to lenders and creditors in the hope that they will not be delayed or damaged in the event of bankruptcy and they also are put in agreements to provide assurances that they are avoiding deals with debtors heading toward bankruptcy.
The courts are split on the enforcement of the prebankruptcy provisions. Some courts have expressed concern as to whether or not the provisions violate public policy. In almost all cases however, the courts have found the agreements are not necessarily self-executing. Therefore, a creditor should be weary of taking any action, which may result in a violation of the automatic stay without first obtaining bankruptcy court approval.
On the positive side, prebankruptcy provisions have proven to speed up the process and assist creditors in obtaining quick relief from the automatic stay of bankruptcy. In addition, some courts have upheld the various admissions and representations as conclusive evidence of the elements needed to lift the stay. This has led to a decrease in litigation cost for some creditors.
It would be dangerous and unadvisable to take any action which may be determined to be a violation of the automatic stay in reliance on the prebankruptcy provisions, but including the provisions may save you litigation fees in the long run. Therefore, while pre-bankruptcy provisions are not guaranteed to work, you may want to include them in your agreements.
Creditors and lending institutions have recently been including various provisions in their contracts and credit agreements, which contemplate what will happen in the event of a bankruptcy. The provisions can be divided into three basic categories: (1) Waivers; (2) Covenants; and, (3) Representations/Admissions.
Waivers limit a borrower's right to either file a bankruptcy petition or to oppose the creditor's lifting of the automatic stay. Covenants provide for immediate relief from the automatic stay or consent not to contest a lift stay motion. Representations/Admissions include provisions in the agreement which admit the elements necessary for the creditor to lift the automatic stay, admit that any future bankruptcy filing will be made in bad faith to hinder or delay the creditor and admissions that security interests are properly perfected.
The prebankruptcy waivers provide a comfort level to lenders and creditors in the hope that they will not be delayed or damaged in the event of bankruptcy and they also are put in agreements to provide assurances that they are avoiding deals with debtors heading toward bankruptcy.
The courts are split on the enforcement of the prebankruptcy provisions. Some courts have expressed concern as to whether or not the provisions violate public policy. In almost all cases however, the courts have found the agreements are not necessarily self-executing. Therefore, a creditor should be weary of taking any action, which may result in a violation of the automatic stay without first obtaining bankruptcy court approval.
On the positive side, prebankruptcy provisions have proven to speed up the process and assist creditors in obtaining quick relief from the automatic stay of bankruptcy. In addition, some courts have upheld the various admissions and representations as conclusive evidence of the elements needed to lift the stay. This has led to a decrease in litigation cost for some creditors.
It would be dangerous and unadvisable to take any action which may be determined to be a violation of the automatic stay in reliance on the prebankruptcy provisions, but including the provisions may save you litigation fees in the long run. Therefore, while pre-bankruptcy provisions are not guaranteed to work, you may want to include them in your agreements.
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