CASE #8

Deltex and electronics manufacturing facility has hired a general contractor to construct a 2,000 sq/ft-car post-tension underground parking garage. There are three allowances included in the guaranteed maximum price contract. All three are essentially contingency funds that the contractor may need due to rain delays, poor soil conditions, and dewatering, each totaling $150,000. None of these conditions truly came to pass. When the client asked for the contract, it did not state when the allowances were required to be accounted for.

Questions:

(NOTE: Explain Your Answers in Detail.

Think Outside the box i.e. subsequent damages, countersuits)Use legal terminology and case law citations as much as possible. Please provide example of a connection to textbook case

• How and when are allowances formalized into the contract?
• NOTE: As time went on, the contractor used creative accounting and charged all sorts of marginal costs against the allowances. Is this legal why or why not?
• Ultimately, the allowances were all "spent." How can allowances be defined and managed so that both parties are treated fairly legally?
• Should allowances exist?
• NOTE: (FYI: https://ogletree.com/insights/construction-one-minute-read-allowance-or-contingency/)