USA – ALABAMA Law and Practice Contributed by: Adam J. Sigman, Crystal H. Walls, Nathan Stotser, Katie Sinclair and Courtney Dow, Dentons
sion of the premises after a default if the lease permits re-entry on default. Alabama law does not impose on a landlord a duty to mitigate damages in the absence of an express obligation in the lease to do so ( Bowdoin Square, LLC v Winn-Dixie Montgomery, Inc , 873 So 2d 1091 (Alabama 2003)). The typical form of an eviction proceeding involving commercial leases is an action for an unlawful detainer. See Section 35-9-1 to -100 and Section 6-6-310 to -353. 7. Construction 7.1 Common Structures Used to Price Construction Projects The type of pricing structure used for projects depends In commercial construction projects, there are typi - cally more guaranteed maximum or fixed-price con - tracts than open-ended cost-plus contracts, while fixed-price contracts are used almost exclusively in the public works sector. 7.2 Assigning Responsibility for the Design and Construction of a Project Alabama law requires a registered architect to sign off on plans for the design and construction of a project (Section 34-2-32). For projects of USD50,000 or more, a contractor must be licensed by the Alabama Licens - ing Board for General Contractors (Section 34-8-9). If there are engineering requirements, a licensed engi - neer must be consulted and approve the plans. In addition, most trades are required to be licensed by their respective governing authority, such as plumb - ers/gas fitters and electrical contractors (Sections 34-37-1 and 34-36-1 et seq). The project’s owner will typically employ an architect and engineer to work with a general contractor to conceptualise the project; the general contractor then delegates subcontracts as necessary, often without being subject to owner on several factors, including: • the current economic climate; • the owner’s desires; • financing concerns; and • public entity status.
approval, unless the owner contractually retains that right. 7.3 Management of Construction Risk Owners and general contractors frequently utilise insurance policies and indemnification agreements in their contracts with each other, and with their subcon - tractors. Since contribution among joint tortfeasors is unavailable, the only method for obtaining contri - bution is to contractually oblige the counterparty to indemnification. Waivers are generally acceptable, and interim and final lien waivers are highly recom - mended with each payment application, and the final payment (including retainage) should be accompanied by a final, unconditional lien waiver and hold harm - less agreement. Limitations or caps on liability can be negotiated into the contract, in addition to provisions requiring the contractor to post payment and perfor - mance bonds from a reasonably acceptable surety. 7.4 Management of Schedule-Related Risk Delays in construction should always be addressed in the contracting documents. While a penalty is not available, the contract can provide for an agreed-upon “liquidated damages” provision for a certain amount to be allocated for each day, week or month that the project is behind schedule or for each milestone missed. Delay damages can be accounted for as a back charge to the contractor to be deducted from payments due. As additional security for paying material suppliers or remedying defects and delays in construction, own - ers and general contractors are entitled to hold back retainage; see Section 8-29-3. An owner or general contractor may retain 10% of payments to the general contractor or subcontractor, respectively. The retainage may only be taken from the first 50% of the payments for completion, after which “no further retainage shall be withheld”. See Section 8-29-3 (i) and (j). 7.5 Additional Forms of Security to Guarantee a Contractor’s Performance Depending on the project’s size, payment and perfor - mance bonds are the most common form of security to guarantee a contractor’s performance on a project.
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