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MAJOR WIN FOR INDUSTRY
What Happened:
In a huge win for public works contractors, the California Supreme Court recently settled the question of whether a contractor may recover when the plans and specifications are correct, but the public authority failed to disclose information in its possession that materially affected the cost of performance. The practical impact of this decision is that it substantially decreases the burden on the contractor for recovering damages in these types of situations.
The Court held, specifically:
"We hold a contractor need not prove an affirmative fraudulent intent to conceal. Rather-with the qualifications stated below-a public entity may be required to provide extra compensation if it knew, but failed to disclose, material facts that would affect the contractor's bid or performance. Because public entities do not insure contractors against their own negligence, relief for nondisclosure is appropriate only when (1) the contractor submitted its bid or undertook to perform without material information that affected performance costs; (2) the public entity was in possession of the information and was aware the contractor had no knowledge of, nor any reason to obtain, such information; (3) any contract specifications or other information furnished by the public entity to the contractor misled the contractor or did not put it on notice to inquire; and (4) the public entity failed to provide the relevant information."
Read the full decision here.
What EUCA Is Doing:
EUCA Contractor Members have access to the EUCA legal referral program. If you need to speak with an attorney, give EUCA a call first and let us refer you to our attorneys and pay the first half hour on our dime. (925) 855-7900.
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