CONSTRUCTION CLAIMS
IMPOSSIBILITY OF PERFORMANCE CLAIMS
Holloway Consulting is a Construction Consulting firm with offices in Colorado and Louisiana. As illustrated on our post at Construction Claims, one of Holloway Consulting’s primary Construction Claims practice areas is in matters involving contractor claims, including claims related to defective contract documentation.
This post continues our series on the Construction Claims services we provide to our clients, in this case, on Impossibility of Performance.
CLAIM DESCRIPTION
Impossibility of performance is an area of entitlement under the defective documentation entitlement. The majority of reported cases, however, address government contracts for procurement, not construction. For example, government contracts for the engineering and manufacturing of advanced technologies procured by government agencies are a popular form of government procurement contract that often results in impossibility of performance claims.
Holloway Consulting’s private sector construction clients also occasionally encounter impossibility of performance situations, which can be defined as an entitlement that forgives contract performance. The basic premise used in impossibility (or impracticality) of performance claims related to construction are not far removed from those used in procurement cases. However, one difference relates to the dual possibilities in construction cases – a structure may have been impossible to construct before work ever commenced or the impossibility may have arisen after construction started. In either case, the contractor confronted with the impossibility will likely either be terminated for default (non-performance) or complete the work after specifications are “relaxed”, while sustaining cost overruns and delays in the process.
CLAIM FORMS
Impossibility of Performance Claims arise in two forms:
(a) Physical impossibility
(b) Economic impossibility
Both of these forms relate, at least in part, to the defective documents entitlement. However, impossibility of performance represents perhaps the most severe form of defective and deficient contract documents. An analogy, however simplistic, is that a defective and deficient specification impedes or disrupts performance, while an impossible specification precludes or forecloses performance.
PHYSICAL IMPOSSIBILITY
The theory of physical or actual impossibility is not particularly difficult to comprehend:
It is a situation wherein the facility cannot be constructed by strict adherence to the plans and specifications. A contract that requires a contractor to place owner-furnished equipment into a specific room with a volume half the size actually required would constitute a “physical impossibility.” Requiring a contractor to produce (by screening) cobbles, while simultaneously directing him to utilize a borrow area which contains only sand, is another simplistic example of impossibility of performance.
ECONOMIC IMPOSSIBILITY
The other aspect of this contractor claim entitlement, that of economic impossibility, that results in most of the cases related to this entitlement. The term economic impossibility has several popular synonyms:
a) Commercial impracticability
b) Practical impossibility
c) Commercial senselessness
These synonyms suggest that economic impossibility relates to the degree of effort required to achieve the desired result; this means, more often than not, that the cost of performance is prohibitively high, and well in excess of what was anticipated. Not surprisingly, prohibitively high costs are consistently at the crux of the related construction contract disputes.
Read other posts on Impossibility of Performance Claims Consulting.
Holloway Consulting
Construction Claims Consultants
12081 W. Alameda Pkwy., #450
Lakewood, CO 80228-2701
Denver Phone: (303) 984-1941
International Toll Free: (888) 545-0666
Fax: (303) 716-0432
Email: steve.holloway@disputesinconstruction.com
Blog: disputesinconstruction.com
Web: hcgexperts.com
Selected Pages at hcgexperts.com, 12-20-11
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