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

  • Posted by scottgaille
  • On May 13, 2020
  • 0 Comments
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 entire construction crew may be quarantined for several days (a “Quarantine Suspension“).  During the Quarantine […]
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Will COVID-19 Increase Oil Demand? [Gaille Energy Blog Issue 86]

  • Posted by scottgaille
  • On May 8, 2020
  • 0 Comments
In 2003, China saw a preview of COVID-19 in the form of another coronavirus called SARS.  SARS struck Hong Kong and sent a wave of change across China.  Yet most Americans were oblivious to its existence.  At the time, though, I was traveling weekly in Asia.  I remember people talking about how they were going […]
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Standby Compensation for Force Majeure? [Gaille Energy Blog Issue 85]

  • Posted by scottgaille
  • On April 30, 2020
  • 0 Comments
“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 be paid due to force majeure.  In response, a contractor may seek to shift the […]
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The General Counsel’s Dilemma: In-House Counsel or Outside Counsel [Gaille Energy Blog Issue 84]

  • Posted by scottgaille
  • On April 21, 2020
  • 0 Comments
For decades, consultants have sought to systematize the process of allocating work between in-house counsel and outside counsel.  The largest companies even have entire “legal services” departments, which provide no “legal services” but are instead responsible for decreasing legal costs across the enterprise.  I participated in such endeavors both as a member of a 90-lawyer […]
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Negotiation Challenges in the World of COVID-19 [Gaille Energy Blog Issue 83]

  • Posted by scottgaille
  • On April 12, 2020
  • 0 Comments
About a month ago, Houston declared a state of emergency due to the COVID-19 pandemic.  We closed our office and sent our five lawyers to work from home.  The good news was that most of our practice involves drafting and revising contracts, which can just as easily be done at home as it can in […]
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Suspension Agreements as an Alternative to Force Majeure [Gaille Energy Blog Issue 82]

  • Posted by scottgaille
  • On March 31, 2020
  • 0 Comments
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 the most troubled assignments during an extraordinary time.  I went to those places no one […]
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Are Longer (More Detailed) Contracts Better?  [Gaille Energy Blog Issue 80]

  • Posted by scottgaille
  • On January 13, 2020
  • 0 Comments
  • "longer contracts" "contract completeness"
Over my 25 years as an energy transactions lawyer, I have watched as agreements of all kinds have become longer and more detailed.  Last week, I was in Canada (-21 degrees) helping a client develop a new agreement. The precedent previously used by the client for the same type of contract ranged from a dozen pages […]
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3 Types of Indemnities (Energy Construction) [Gaille Energy Blog Issue 79]

  • Posted by scottgaille
  • On July 10, 2019
  • 0 Comments
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 defend (including taking such steps and incurring such fees, costs, and expenses as may be […]
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Unanticipated Site Conditions & Energy Construction Agreements [Gaille Energy Blog Issue 78]

  • Posted by scottgaille
  • On June 28, 2019
  • 0 Comments
  • "site conditions"
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 conditions, then contractor is entitled to seek a price adjustment. The common meaning of unanticipated […]
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