Snow and Ice Maintenance Tenders and Contract Interpretation Robert Kennaley McLauchlin

1
Snow and Ice Maintenance Tenders and Contract
Interpretation Robert KennaleyMcLauchlin
Associates
2
Good vs. Bad Contracts

• Understanding and Managing Risk under a Contract
  is important regardless of whose form of
  Contract is proposed
• Understanding the difference between a good
  contract and a bad contract is critical

3
Good vs. Bad Contracts

• Historical Problems with Contracts
• Inadequate Descriptions of the Work
• - vague, ambiguous, inconsistent and confusing
  descriptions of the work

4
Good vs. Bad Contracts

• Historical Problems with Contracts
• Contractors Assume Too Much Liability-
• - Over-reaching Hold Harmless Clauses
• - Over-reaching Scopes of Work

5
The Contract and Scope of Work

• Liability Starts with the Occupier under the
  Occupiers Liability Act
• The Owner/Property Manager/Client will be an
  Occupier under the Act

6
The Contract and Scope of Work

• The Owner/Property Manager/Client can assign
  under a Contract some of its responsibilities
  under the Act
• The Contractor becomes responsible to meet the
  obligations he assumed under the Contract

7
The Contract and Scope of Work

• The Contractor is not responsible to do work,
  undertake tasks or assume risk unless he has,
  either expressly or by implication, agreed to do
  so under the Contract
• It is accordingly critical that the Scope of
  Work be properly described in the Contract

8
The Contract and Scope of Work

• To Properly Price the Work and Avoid Disputes
  the Contractor Needs to
• - understand the Scope of Work
• - not assume any unreasonable obligations
  under the Contract
• - avoid obligations he is not being paid to
  assume

9
The Contract and Scope of Work

• To Properly Get a Good Price and Avoid Disputes,
  the Owner Needs to
• - provide a clear Scope of Work
• - avoid unreasonable or impossible
  requirements (which are expensive to price)
• (which can lead to disputes)

10
The Contract and Scope of Work

• The Overreaching Scope of Work
• - Promising the Impossible
• - Promising the Unknown
• - The open by Undertaking
• - The problem of the Second Pass

11
The Contract and Scope of Work

• Contractual Terms can be Divided into Two Parts
• 1. General Conditions
• Generally apply to all projects
• 2. Specific Conditions / Schedules
• Specifies work to be performed
• Specifies price
• Usually varies from project to project

12
The Contract and Scope of Work

• 1. General Conditions
• The Parties
• Payment Provisions
• Workplace Safety Insurance Issues
• Notice Provisions
• Indemnification Provisions
• Termination Provisions
• Insurance Provisions

13
The Contract and Scope of Work

• General Conditions Should be unique to Winter
  Maintenance Industry !!
• Parked Vehicles
• Improperly Maintained Premises
• Severe weather conditions?
• Stop work orders
• Strikes, lock-outs, etc.

14
The Contract and Scope of Work

• 2. Specifications / Schedules / Site Plans
• Should be made part of the Contract
• These are More Important than the Legalese

15
The Contract and Scope of Work

• 2. Specifications / Schedules / Site Plans
• Site Plans Should Be Used!!!
• These Should be Made a Schedule
• Particular Limitations / Issues Can and
  Should be Addressed in the Site Plans

16
The Contract and Scope of Work

• The Site Plan Should Clearly and Accurately
  Describe
• The work to be performed
• Any limitations on the scope of work
• Site conditions
• Special site features to be considered

17
Discretion to Use Ice Melters

• To Avoid Disputes Contracts should clarify the
  contractors obligation to use ice melting
  products
• Contracts Should Clearly Specify who makes the
  decision about the application of ice melting
  products
• either it is the Contractor or the Client

18
Liability for the Slip and Fall

• the Contractor Generally Avoids Liability
• if he properly performs his contract
• if he is not otherwise Negligent
• and so long as he has not assumed responsibility
  to do more than properly perform his work under
  the Contract
• this is often done through the over-reaching
  Hold Harmless Clause

19
Hold-Harmless Indemnification

• Indemnification should only occur where the
  contractor breaches the contract or is
  negligent in the performance of his work as
  specified
• Indemnification should also be limited to
  damages for personal injury or property damage,
  and to the limits of the Contractors insurance

20
Contracts put out to Tender

• What are the Options where less than clear, or
  less than preferred, contractual terms are put
  out to tender?
• Dont Counter Offer!
• Dont Qualify or Clarify Your Bid!!

21
Contracts put out to Tender

• M.J.B. Enterprises Ltd. v. Defence Construction
  (1951) Ltd., 1999 1 S.C.R. 619
• the low bidder had added a handwritten note to
  the tender form, increasing its price in the
  event a certain pipe was to be used
• M.J.B. was the second low bidder

22
Contracts put out to Tender

• M.J.B. Enterprises Ltd. v. Defence Construction
  (1951) Ltd., 1999 1 S.C.R. 619
• MJB objected that it should have been
  awarded the Contract as the note was a
  qualification which
• rendered the low bid non-compliant and
• rendered the low bid incapable of acceptance

23
Contracts put out to Tender

• M.J.B. Enterprises Ltd. v. Defence Construction
  (1951) Ltd., 1999 1 S.C.R. 619
• The Owner relied on the privilege clause
• The lowest or any tender not necessarily
  accepted
• The Owner argued that the clause allowed it to
  award to even a non-compliant bidder

24
Contracts put out to Tender

• M.J.B. Enterprises Ltd. v. Defence Construction
  (1951) Ltd., 1999 1 S.C.R. 619
• The Court
• found an implied term that only compliant bids
  would be considered
• held that the privilege clause did not allow the
  Owner to award to non-compliant bidder

25
Contracts put out to Tender

• Bidding Contractors Who Qualify or Clarify their
  Bids run the risk that their Bids will be
  rejected out of hand as being
  non-compliant!
• In fact, Tendering Authorities are now
  well versed in the Law of Tendering and will
  generally not consider non-compliant
  bids.

26
Contracts put out to Tender

• Contractors who are concerned about the terms of
  a Contract put out to Tender can
• request a clarification from the Owner/Consultant
  in accordance with the terms of the Tender
  Package
• (in which case the Owner/Consultant is to issue
  the response to all bidding contractors)

27
Contracts put out to Tender

• Contractors who are concerned about the terms of
  a Contract put out to Tender can
• request that the terms, perhaps be changed
• (in which case the Owner/Consultant can issue an
  Addendum, if so inclined)

28
Contracts put out to Tender

• Contractors who are concerned about the terms of
  a Contract put out to Tender can
• - price the risk assumption or refuse to bid
  the Contract.

29
Snow and Ice Maintenance Tenders and Contract
Interpretation Robert KennaleyMcLauchlin
Associates