USA – NORTH CAROLINA Law and Practice Contributed by: John Livingston and Brittani Miller, Kilpatrick
7. Construction 7.1 Common Structures Used to Price Construction Projects The most common structures used to price con - struction projects are the fixed-price (lump sum) structure, where the contractor agrees to com - plete the project for a predetermined price, cov - ering all labour, materials and overhead costs, and the cost-plus structure, where the contrac - tor is reimbursed for the actual costs incurred during the project, including labour, materials and subcontractor fees, plus an agreed-upon fee, which may be a percentage of the other construction costs. In a cost-plus contract, the parties may agree to a maximum price. 7.2 Assigning Responsibility for the Design and Construction of a Project Responsibility for the design and construction of a project is typically assigned through vari - ous contractual arrangements, which determine how obligations are allocated among the parties involved, such as owners, contractors, archi - tects, engineers and subcontractors. Below is an overview of the different methods and typical allocation of responsibilities. Design-Bid-Build Overview: • The project owner contracts separately with a design professional (architect or engineer) for the design phase and a general contractor for the construction phase. • The design is completed before bidding begins, and the contractor is selected through competitive bidding. Responsibility allocation:
complaint in the jurisdiction where the property is located. If the court rules in the landlord’s favour, the tenant may be ordered to vacate the property. The entire process usually takes sev - eral weeks, depending on court schedules, but delays can occur if the tenant appeals the deci - sion or contests the eviction. 6.22 Termination by a Third Party The government or a municipal authority, under certain circumstances, typically through the exercise of eminent domain and condemna - tion, may have the ability to terminate a lease, depending upon the amount of property taken and the terms and conditions of the lease agree - ment. In the event of an exercise of eminent domain, the landlord typically receives any com - pensation paid by the government or municipal authority, and the terms of the lease dictate how much, if any, of such compensation the landlord would be required to pay to the tenant. 6.23 Remedies/Damages for Breach In the event of a tenant breach and lease termi - nation, in addition to charging the tenant for the remaining rent due for the term of the lease, land - lords can seek damages for physical damage to the property and other losses directly caused by the breach, such as lost rental income, expenses incurred to re-lease the property (eg, advertising, broker fees or tenant improvements) and attor - neys’ fees, if these remedies are provided for in the lease agreement. However, landlords are obli - gated to mitigate damages by making reasonable efforts to re-rent the property. Security deposits may also be applied to unpaid rent or damages, subject to the terms of the lease agreement. Landlords typically hold security deposits in the form of cash, but letters of credit are also com - mon.
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