As property owners shift their focus to repairing damages from Hurricane Ida, they should not lose their focus when it comes to the less apparent concerns that come with engaging contractors. Entities, like the Louisiana State Contractor Licensing Board, provide a certain level of protection to the consumer; however, caveat emptor (“let the buyer beware”) should still always be in the back of the minds of property owners as they navigate the path to recovery. The checklist below is provided to assist in this process.
A party to a contract may under certain circumstances be excused from performing a contractual obligation when the failure to perform is caused by a “fortuitous event”—i.e., force majeure or an “act of God”—that makes performance impossible. Whether COVID-19 and related events, such as the pandemic declaration by the World Health Organization, government travel bans, or government declarations, constitute force majeure that impact contractual performance obligations depends on the language of the contract. Contracts often contain force majeure provisions, which will control in the event of a dispute over performance obligations. If the contract lacks a force majeure provision, or if the provision fails to address a particular event, such as a pandemic, specific default rules may apply depending on the jurisdiction, governing law, and industry.
Continue Reading Contract Disputes from COVID-19: Force Majeure Checklist
The Louisiana Recovery Task Force has outlined programs that may help Louisiana companies get back to business following the historic August 2016 flooding.
More than 14,000 businesses were affected by the flooding. The concepts outlined by the Louisiana Task Force include providing banks with certain guarantees to incentive lending; compiling data on consumers and client…
In response to the August 2016 flooding event, there have been several articles about the Federal Emergency Management Agency (“FEMA”) regulations, the National Flood Insurance Program (“NFIP”), the base flood elevation requirements relating to a building damaged by flooding, and local government rebuilding requirements. Please click here to read the client alert that will…
The Louisiana Housing Corporation has released the 2016 Distressed Projects Initiative Notice of Funding Availability (NOFA). The NOFA is designed to provide funding to financially distressed projects awarded 9% Low Income Housing Tax Credits (LIHTC) through the 2015 LIHTC Funding Round that are located in Hurricanes Ike and Gustav designated parishes. The deadline for submitting…
As property owners shift their focus to repairing the very visible water damage to buildings and other structures, they should not lose their focus when it comes to the less apparent concerns that come with engaging contractors. Entities, like the Louisiana State Contractor Licensing Board, provide a certain level of protection to the consumer; however, caveat emptor (“let the buyer beware”) should still always be in the back of the minds of property owners as they navigate the path to recovery. The checklist below is provided to assist in this process.
1. Contact your insurance carrier. Document all damage before undertaking repairs.
2. Hire only licensed or registered contractors.
- Residential building contractors performing work having a cost of $50,000 or more are required to be licensed by the Louisiana State Contractor Licensing Board. Such contractors are required to maintain workers’ compensation insurance and commercial general liability insurance in the minimum amount of $100,000.
- Persons performing home improvement services having a cost of more than $7,500 are required to be registered with, and approved by, the Contractor Licensing Board.
- Persons performing mold remediation also are required to be licensed by the Contractor Licensing Board.
- Verify the contractor’s licensing or registration by calling the Contractor Licensing Board at 225.765.2301 or by searching the Board’s website database.
A “force majeure” clause is a contract provision that relieves the parties from performing their contractual obligations when certain circumstances beyond their control arise, making performance commercially impracticable or impossible. In Louisiana, absent agreement to the contrary, force majeure excuses parties from liability when they fail to perform due to a fortuitous event that makes performance impossible. So, in determining whether the doctrine applies, it is necessary to determine (1) whether performance is impossible and (2) whether the impossibility was caused by a fortuitous event. Here are a few things to consider when confronting force majeure issues:
- In many commercial transactions, force majeure issues have been addressed in the contract, so it is important to obtain and review the contract.
- Many contractual provisions and some statutory provisions require a party that is claiming force majeure to notify the other parties to the contract of the event of force majeure. Some provisions require “prompt,” “timely,” or “seasonable,” notice. Therefore, it is important to determine promptly whether there is a notice requirement in your client’s situation. Don’t just assume that because everyone knows about the 2016 flooding in Baton Rouge and surrounding parishes, notice provisions can be disregarded.
- Some force majeure provisions or situations may totally relieve a party of an obligation to perform a contractual obligation. Other situations may merely suspend or delay the time for performance. It is important to determine which is applicable in a particular situation.