June 2009

The rules of engagement

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What happens when there isn't a signed contract?

by Brian P. McCormick
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Consider the following: A roofing contractor contracted with an owner to reroof a large downtown office building. The project's specifications called for a roof system produced by a specific manufacturer. After negotiating with a local distributor with whom the contractor had an ongoing relationship, the contractor issued a purchase order for $155,000 designating the specific materials needed for the project.

The purchase order contained a provision, which had been recently added by the contractor, requiring the distributor to warrant the roofing materials against deficiencies and defects for a period of two years from the date of project completion.

After receiving the purchase order, the distributor sent the roofing contractor its standard order acknowledgment form, which the contractor had received on many occasions, agreeing to provide the materials for the $155,000 price. The order acknowledgment form contained a standard provision that stated the distributor would warrant the materials for a period of one year from the purchase date.

The distributor's order acknowledgment form also contained a provision limiting the time in which the contractor could bring a lawsuit against the distributor to one year after project completion. According to the form, all claims brought after this time...

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