Incentive-Based Compensation for Actual Cost and Time & Materials Construction/Services Contracts [Gaille Energy Blog Issue 94]

Gaille Energy Blog Issue 93 explained the following four types of construction/services compensation and the incentives created by each: Lump SumUnit PriceTime & Materials (T&M)Actual Cost This issue discusses how incentive-based compensation mechanisms can be added to Actual Cost and... Continue Reading →

4 Types of Construction Compensation: Lump Sums, Unit Prices, Time & Materials, and Actual Costs [Gaille Energy Blog Issue 93]

This article explains the differences between the four types of compensation typically used in energy construction agreements: Lump Sums. The contractor is paid a flat price for successful completion of all of the work.  For example, a contractor might be paid a... Continue Reading →

Adjustment Clauses in Services and Construction Agreements [Gaille Energy Blog Issue 92]

A Contractor’s pricing and schedule are based on a variety of factors, including the scope of work, site conditions, and seasonal weather risks.  Sometimes nothing changes.  More often than not, though, the Owner makes changes to the scope of work—or... Continue Reading →

Checklist and Compendium of COVID-19 Force Majeure Issues [Gaille Energy Blog Issue 88]

Over the course of the last few months, lawyers have been deluged with articles about COVID-19 and force majeure, much of them containing quite similar content and analysis.  My Research Assistant at The University of Chicago Law School, Tanner Harris,... Continue Reading →

Avoiding Moral Hazard When Allocating COVID-19 Force Majeure Risk in Construction Contracts [Gaille Energy Blog Issue 87]

One of the principal COVID-19 issues facing the construction industry is a work shutdown due to an employee exhibiting COVID-19 symptoms, testing positive for COVID-19, or being exposed to someone who has tested positive for COVID-19.  In such cases, the... Continue Reading →

Standby Compensation for Force Majeure? [Gaille Energy Blog Issue 85]

“Time, no money,” are words commonly spoken by project owners when negotiating force majeure relief in construction and services contracts.  It means that while a contractor can receive schedule extensions (more days to complete the work), no additional compensation will... Continue Reading →

Suspension Agreements as an Alternative to Force Majeure [Gaille Energy Blog Issue 82]

Lawyers often gain valuable experience by accident.  This was the case with me and force majeure.  A couple of weeks after 9/11, I joined Occidental Petroleum’s business development office in Dubai.  As the youngest person on the team, I received... Continue Reading →

3 Types of Indemnities (Energy Construction) [Gaille Energy Blog Issue 79]

An indemnity is one party’s agreement to hold another harmless for certain types of claims or losses.  A typical definition of Indemnify would be as follows: “Indemnify” means release, reimburse, protect, indemnify, compensate, make whole, make good, hold harmless, and... Continue Reading →

Unanticipated Site Conditions & Energy Construction Agreements [Gaille Energy Blog Issue 78]

Contractors are generally entitled to seek additional compensation (a “price adjustment”) for encountering unanticipated site conditions. The more challenging question is defining what, precisely, constitutes an unanticipated site condition.  For example, in the clause below, unanticipated remains undefined: If contractor encounters unanticipated site... Continue Reading →

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