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Wilkes-Barre Business Law Blog

Work with experienced legal counsel to address legal issues surrounding construction contract biddin

In construction law, the bidding process is a crucial phase of a construction project, since it is when parties establish the overall cost of the project. For contractors, getting the numbers right is important, not only to ensure the contractor is a competitive bidder, but also to ensure the contractor doesn’t set itself up for failure and financial loss.  

The bidding process for construction projects is different for public contracts and private contracts. Public contracts involve a government agency requesting the bid, while private contracts involve private companies. In private contracts, the bidding process is not as formal as with public contracts, since private contract bidding is not bound by many special rules and regulations outside the ordinary rules of contract law. 

Work with experienced legal counsel to protect your rights under construction contract

When owners, contractors and subcontractors enter into an agreement to engage in a project, they expect that they will be able to rely on each other party to honor their obligation under the contract. Good construction contracts do, of course, allow for changes in the project timeline and, if necessary, changes in the plan itself. A certain amount of flexibility is important in any construction project.

When one party fails to live up to its obligations under a construction contract, though, the other parties involved in the project can suffer serious economic losses. Take, for example, the case of an Arizona construction company who is currently suing for millions of dollars of damages in connection with a botched project at the Chestnut Street Tower in Philadelphia. 

Overuse of non-compete agreements can backfire on businesses, P.2

Last time, we began looking at the use of non-compete agreements for low-wage earning employees. As we noted, there can be legitimate reasons for negotiating non-compete agreements with such employees, but it is important to keep in mind that every non-compete agreement must aim at protecting valid business interests.

Two companies that have recently been in the news for their use of non-compete agreements for low-wage earning employees are Jimmy Johns Gourmet Sandwiches and Amazon. While Amazon cut out its use of such agreements when the practice became public in 2015, Jimmy John’s only recently agreed to discontinue its use of such agreements as part of an agreement with New York Eric Schneiderman, who called the use of non-compete agreements for low-wage employees “unconscionable.” 

Overuse of non-compete agreements can backfire on businesses, P.1

In our last post, we began looking at some of the general requirements of non-compete agreements. We have specifically mentioned the requirements of consideration, protection of a valid business interest, and reasonableness of duration, geographic area, and the scope of activities prohibited.

Another important consideration for businesses in drafting and negotiating non-compete agreements is the status of the employees on which they seek to impose non-compete agreements. Ordinarily, businesses reserve non-compete agreements for employees that present a higher risk of misappropriating valuable business information. Increasingly, though, businesses are choosing to impose non-compete agreements on lower-level employees. 

Non-compete agreements: looking at some basic rules

Businesses, particularly those in competitive industries, know that intellectual property protection is important to ensure valuable business information is not misappropriated. Patent and trademark registration, and trade secret enforcement, can be valuable ways to do this, but so can non-compete agreements, if they are used prudently.

Different states have different rules when it comes to the validity and enforceability of non-compete agreements. In general, because non-compete agreements are contracts, they must abide by the principles of contract law. Among other things, this includes the requirement of sufficient consideration, or something given in exchange for the agreement. Consideration can consist of the offering of employment, a promotion, or some other form of compensation. 

Proper entity selection an important decision when starting a business, P.2

Last time, we looked very briefly at some of the basic characteristics of sole proprietorships and partnerships, noting the importance of entity selection in business planning. Both of these types of business entities are relatively simple to set up compared to limited liability companies and corporations.

A limited liability company has some of the features of a partnership and some of the features of a corporation. Owners, called members, of limited liability companies have the same liability protection as owners of corporations. LLCs, however, are taxed like partnerships and provide the same flexibility of management as partnerships. LLC formation requires filing a Certificate of Organization with the state along with other documentation, and LLCs are required to register with the state on an annual basis. 

Proper entity selection an important decision when starting a business

In starting a business, there are a lot of decisions that need to be made, including financing, entity selection, and structuring the business. Selecting the specific form a business will take is important for a number of reasons.

Entity selection affects a number of aspects of business, including the costs of formation, ease of dissolution, distribution of profits, ownership and control, liability, taxation, and ability to generate capital. All of these things need to be given careful thought before selecting an entity, and an experienced attorney can help provide skillful guidance. 

Work with experienced legal counsel to address issues in real estate development

Previously, we looked briefly at ongoing efforts by the Wilkes-Barre school to secure a location for a new high school. As we noted, the school district has taken steps to obtain a plot of land owned by Pagnotti Enterprises, but the property presents environmental issues and has yet to be approved by the Department of Environment Protection. At this point, it remains to be seen what the outcome will be for the development project.

Environmental issues are, of course, important to thoroughly address in any real estate development project, but they are only one part of what needs to be done in terms of due diligence on a property. There is also the need to review issues related to zoning, utilities, assessments, ownership of development rights, occupancy issues, and licenses and permits. In other words, there needs to be a thorough understanding of the state of the property with respect to regulatory compliance. 

School district moves ahead with site for new high school project

Wilkes-Barre readers are probably aware that one of the ongoing issues the district has been discussing is where to build a new high school. In 2015, the school board approved a plan to combine Meyers and Coughlin high schools, but it has been a struggle to locate a site for the project since that time.

Initially, the consolidated school was going to be built on the site where Coughlin stood, but late last year, a hearing was held on proposed zoning changes for the project and the plan was rejected by the city zoning board. Some of the other sites that have come under consideration are a plot of land off State Route 115 and a Geisinger Health System site, both in Plains Township.

Addressing the issue of delays in construction contracts, disputes, P.3

We’ve been looking at the issue of delay in construction projects, particularly how delays are to be handled under a construction contracts. Picking up where we left off last time, concurrent delays are another issue that should be dealt with in construction contracts. Concurrent delays are those for which there are two or more potential explanations for the cause of the delays, including actions or omissions of both the property owner and the contractor.

Although the courts have established basic rules for handling concurrent delays, applying these rules is not always easy and requires careful attention to the facts of the case. Answering the question of who is responsible for concurrent delays is not always easy. Another important issue is float apportionment.