UNIVERSITY OF CALIFORNIA
SCHOOL OF LAW
TAKE-HOME COURSE EXAMINATION
SPRING 2002
STUDENT EXAM #
COURSE NO. 257.5
CONSTRUCTION LAW (2 Units)
PROFESSOR ALAN 'E. HARRIS
You have 48 hours to complete this exam. To pick up this exam from Take-Home
Exam Headquarters, Room 123 Boalt, you MUST bring your exam label with your exam
number on it. This copy of the exam will then be date- and time-stamped. You must return this
copy of the exam and your exam answers to Take-Home Exam Headquarters within 48 hours
after picking it up. Your answers will be date- and time-stamped.
Type your exam number, course name, page number and instructor's name on each page
of your typed answers. Answers must be typed and double-spaced.
SPECIAL INSTRUCTIONS:
1
There are 3 questions on 5 pages. You must answer all questions.
The total number of words for all answers combined should be limited to
2.
3,000. You can allocate the words between the answers as you choose.
Your instructor has asked that exams be sent by FedEx to the instructor's
3.
office. When you return your answers to Take-Home Exam Headquarters, you must
provide TWO COPIES of your answers. One copy will be sent to your instructor, and one
copy will be kept on file in case there is any problem with FedEx.
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FINAL, EXAMINATION
Course No. 257.5
Construction Law
(2 Units)
May 2002
Professor Alan E. Harris
Question I
You have just graduated from law school and have taken a job at a high-powered law firm in San
Francisco with a minimum billing requirement of 2000 hours per year. In anticipation of your large
starting salary you have purchased your first home, a 70 year-old fixer-upper in West Berkeleythat
you hope to upgrade and remodel. As part of the work you have planned, you intend to remodel
the kitchen. replace the electric wiring, and repaint the interior and exterior. Because you know that
you will be workmg day and night, you plan to extend the south end of the house to create an
addition for your home office. Since the income from the new job hasn't started, and since you
have student loans to repay, money is very tight.
Your best friend, Bob, just received his license in architecture and has agreed to help out. This will
be his first project. He and you visited the site together before the purchase. Bob says there are a
lot of unknowns in the house, including structural and plumbing, which are not in your current
remodel plans. ~lthoughBob has these concerns, you decide to go ahead anyhow.
Since you are going to act as your own lawyer:
1.
What project delivery system to you plan to use, and why?
2.
What pricing system with the contractor or contractors have you decided to use, and why?
3.
How are you going to select the contractor or contractors, and why?
What techmques, if any, are you going to use to make sure the contractor(s) does the work
4.
and pays the subcontractors, and why?
FOR THE REMAINING QUESTIONS, ASSUME:
1.
CALIFORNIA STATUTES APPLY
THE CONTRACTS ARE SILENT ON THE MATTERS IN DISPUTE
UNLESS A CONTRAa PROVISION IS SUMMARIZED OR REFERENCE IS MADE
TO AN AIA PROVISION
Page 2 of 5
2.
3.
USE GENERAL LEGAL PRINCIPLES SUPPLEMENTED BY THE
CALIFORNIA CASES WE HAVE READ
You have hn-ed Bob to act as the archtect for the project and he has hued Sam to act as his
structural engineer. Before designing the foundation for the office, Sam tells Bob that it would be a
good idea to get some soils donnation about the site. Bob knows that you have not budgeted for a
geotechnical investigation and looks for ways to save you money. He finds a report that was done
for a commercial project down the street. He and you agree to have Sam use this as the basis of his
design. Based on the fact that t h report shows the soil is clay, Sam designs a pier system with the
note "all piers to be founded in two feet of undisturbed soil."
While you are negotiating with Contractor for a fixed price contract, Bob gives Contractor the old
geotechnical report but tells h m it is "for informational purposes only" and is not to be relied on by
h.
Contractor is also told he can go out behmd the house and dig holes if he wants before signing
the contract because you "don't want any surprises." Contractor chooses not to take you up on
your offer.
While d h g for the foundations, Contractor hits an old buried septic tank This part of Berkeley
was on septic tanks until the 1960s. He has to bring in additional equipment to remove the tank
Since the tank was 6 feet deep, the design of the foundation at this location had to be changed and
the excavation had to go 4 feet below the bottom of the tank Contractor told Bob about this on
one of Bob's weekly visits to the site and said "this might hold me up."
W e the addition was being framed, you decided to change the windows in the house and in the
addition to double-paned windows for energy reasons. You thought this was a good time to make
this decision since you knew that the patching of the roof on the house and installation of the roof
of the addition were "on hold" since Contractor was trying to find a new roofing subcontractor (his
original roofer had gone out of business). You and Contractor agree on the added cost of the new
windows, but "agree to disagree" on whether this change should give Contractor added time to
finish the job.
Everything else goes smoothlywith the construction except that it finishes three months later than
you planned. In the meantime, you have been living in your old apartment with three third year law
students who believe in paltyLng every night in the apartment. To get your work done at the office,
you've stayed at the office until at least 10 P.M. each night and, since the buses don't run at that
hour have had to take taxis home every night.
Now that the job is over, Contractor has presented his final bill. You are happy with it except for
the following:
He wants a time extension of 3 months (the exact amount of the delay) blaming the septic
1.
tank, your window change, the need to find a new roofer, and the fact that he couldn't get a City
inspector out to do the final inspection for one month ( t h is Berkeley after all) so you could move
in.
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2.
He wants extra money for these delays and items of work
a.
$1,000 for the cost of removing the septic tank;
b.
$4,000 for the cost of the changed foundation where the septic tank was removed;
c.
$3,000 for overtime he paid his workers and subcontractors to finish the job;
d.
$1,000 for a bonus to his superintendent for "a job well done"; and
$5,000 for the profits he would have made on another job if he'd been able to move
e.
his crews there three months earlier.
Contractor has failed to offer any reduction in his price for the rent you had to pay on your
3.
old apartment for the three months, the taxis you had to take from work, or the meals you had to
buy in San Francisco at night because you were stuck there.
Contractor has also failed to agree to remove and replace the electrical wiring he put in. You
have read in the paper that this type of wiring (which was selected by the electrical subcontractor
working for Contractor) can deteriorate and cause fires. You believe it was negligent to install this
type of wire and, besides, Contractor agreed to meet all "codes, standards, and perform in a
workmanlike manner." You are so mad about this, that you also intend to sue the electrical
subcontractor.
4.
You had specificallyselected Red Siena Brick manufactured by the Oakland Brick Company
5.
for the walkway from the street to your new office. T ~ Iwas
S to be the grand entry to your office
and was very important to you because your career plan was to work for 2 years in the San Francisco
firm (to pay off student loans and acquire a good form file) and to then open up an office in your
home. The Contractor installed Red Fired Brick manufactured by the Hayward Brick Company
which has a much higher sheen. You want him to remove and replace the brick or give you a credit
for this cost in his final billing.
Before making payment, you are also concerned about a letter you have received from
6.
Ralph, the original roofer. He claims he had ordered materials and had done some patch work on
the roof but was then thrown off the job by Contractor for no reason. He hasn't been paid and is
threatening to put a mechanics' lien on the property unless you pay him for the materials and the
patchwork he did. Contractor tells you to ignore this letter for several reasons: there is a pay if paid
clause in the subcontract and, since Contractor will never bill you for Ralph's work, Ralph is not due
any money Ralph never told Contractor that he intended to lien the job and never sent Contractor a
preliminary notice ('you can't remember if you got one earlier); and Contractor will "protect" you if
Ralph really makes a claim.
Finally, you have learned that Contractor was licensed as a contractor when he signed the
7.
contract with you but let his license lapse during the time he was waiting for the building inspector
to come out to do the final inspection. He has never revived the license since he had already
decided to open a software design company in Sunnyvale.
You have been thinking about the payment for 60 days and need to come to some decision:
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Which of Contractor's claims may be valid and why? What additional facts would assist in
1.
your analysis?
Which of your claims may be valid and why? What additional facts would assist in your
2.
analysis?
What should be done with the letter from Ralph and why? What additional facts would
3.
assist in your analysis?
4.
Can you make a claim against the electrical subcontractor and why?
Are Bob and/or Sam responsible for any of Contractor's claims and why? What additional
5.
facts would assist in your analysis?
Oues tion I11
You've now been living in the house for 5 years and have opened a successful law office in the
addition Bob designed and Contractor b d t . A good client was corning in to have her will signed
and slipped on the Red Fired Brick walkway that Contractor had installed. The injuries are fairly
serious and the client has filed suit against you, Bob, Contractor and Hayward Brick You now
know that Red Fired Brick is more slippery than Red Siena Brick You also know that the irrigation
system designed by Bob has sprayed water on the brick for years. Since the walkway is on the south
side of the house, it gets little sun and the irrigation water has led to the growth of moss on the
walkway.
You have pulled out your old contract with Bob. It contains an exact copy of 2.6.2 of the AIA
B- 141 document with regard to Bob's responsibilities during construction. The contract also says
that Bob's liabilityfor negligence will be limited to the amount of his fee ($3,000).
You have also looked at your contract with Contractor. It says that he will i n d e d y you if
"anythmg ever goes wrong with the construction."
You have called the Hayward Brick Company to get its catalogue. It describes Red Fired Brick as
"safe" and "non-slip." Since you had planned on using Red Siena Brick originally, this is the first
time you have seen t h catalogue.
What are the client's chances of successfully suing you, Bob, Contractor and the Hayward Brick
Company and what theories would she use against each? What are your chances of successfully
getting indemnity from each of the other defendants and why?
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