LITIGATION ALERT: CONTRACTUAL RISK SHIFTING: COMMERCIAL CONSTRUCTION

In the commercial construction industry, especially in cycles of downturn in the overall economy, instances often arise in which the owners of projects encounter financial difficulties.  This can result in an abandonment of the project by the owner and a failure of the owner to pay the general contractor for, among other things: (1) the general contractor's goods and services; (2) the goods and services provided by subcontractors of the general contractor; and (3) contractual retainage that has been withheld from the general contractor and subcontractors pending substantial completion of the project.