Case #3

Mega Manufacturer, Inc. (MMI) sought to build a new factory. MMI retained

Awesome Architects, Inc. (AAI), an architectural firm, to create the plans and

specifications. Based upon this design, the owner entered into a $2 million fixed-price contract with Prime Builder, Inc. Prime Builder hired several subcontractors, including a foundation subcontractor (Foundation, Inc.), an electrical subcontractor (Electrical, Inc.), and a

roofing subcontractor (Roofer, Inc.). The foundation subcontract required Foundation to "indemnify" MMI and Prime Builder against any damages, loss or claim for personal injury, or property damage arising out of Foundation's performance of its subcontract"however caused."

The Electrical subcontract required Electrical to indemnify Prime Builder against any

damages, loss or claim for personal injury, property damage, or loss of usebut "only

to the extent caused by" Electricals negligence or breach of contract. The Roofer subcontract contained no indemnity provision. Things did not go smoothly on the project.

The newly built foundation failed a compression test. The problem was traced to a

defective soil report relied upon by Alin creating the foundation's design. Foundation, Inc.

was required to redo the foundation. This delayed the start of work by other subcontractors.

An employee of Electrical, Jane Sparks, suffered an electrical shock while working

on a line she thought was turned off. It turned out that Electricals' foreman forgot to

tell Prime Builder to turn off electricity to that part of the building. Sparks had tested

the line before working on it, and the volt meter had shown the line was dead. The volt

meter was manufactured by Atoms Manufacturing, Inc. Prime Builder's foreman, while inspecting the half-completed roof first thing in the morning (and before Electricals' employees had arrived), slipped on ice and fell off company policy. Litigation ensued. The foundation's failure resulted in MMI imposing liquidated damages (see Section 20.12) on Prime Builder. The contractor brought a "contractual indemnity" claim against Foundation to recover those damages. Sparks sued Prime Builder for negligence in failing to make sure the electricity was cut off to an area of the building where Electrical was working. Sparks separately sued Atoms Mfg. for products liability. Prime Builder brought (1) a "contribution" claim against Atoms Mfg. and (2) a "contractual indemnity" claim against Electrical. Prime Builder's foreman sued Roofer for premises liability, on the ground that his access to the roof had not been blocked until the safety of accessing the roof could be assessed. Roofer brought a "contribution" claim against the prime contractor.

Question:

Please evaluate this scenario from a legal perspective. I will be looking for legal terms and jargon, case law justification and citation of source of your response. You need to include at minimum a statement and/or discussion on the source or statement of the problem; rights and duties; sub-bids rights/issues; bidding bargaining situations and penalties/notices/claims/contracts. Please provide some original thought. Please provide no more than 2 graphs or tables if applicable.