Tag Archives: estimate

THE WORD “ESTIMATE” IN A CONTRACT MATTERS AS TO A COMPLETION DATE

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Language in a contract matters. The word “estimates” or “estimated” matters particularly when it comes to a date certain such as a substantial completion or completion date.  Remember this.

Here is an example.

In Parque Towers Developers, LLC v. Pilac Management, Ltd., 49 Fla.L.Weekly D190a (Fla. 3d DCA 2024), a trial court held that the developer did not complete the construction of five condominium units by the date in the purchase agreements. The developer appealed because “[t]he agreements contain no date certain for the completion of the units, but rather include a clause that ‘Seller estimates it will substantially complete construction of the Unit, in the manner specified in this Agreement, by December 31, 2017, subject to extensions resulting from ‘Force Majeure (the ‘Outside Date’).’” Parque Towers, supra. Another provision in the purchase agreements stated, “[w]henver this Agreement requires Seller to complete or substantially complete any item of construction, that item will be understood to be complete or substantially complete when so completed or substantially completed in Seller’s opinion. Id.

The units were completed with closing taking place in early 2019 – LONG after the December 31, 2017 date. The purchasers sued the developer claiming the developer breached the contract, which the trial court agreed with in a non-jury trial.  On appeal, the appellate court reversed…because language in a contract matters:

Here, the agreements did not require [the developer] to complete the units by December 31, 2017, or otherwise make time of the essence as to the seller’s obligations. The only completion date referenced in the agreements is specifically described as an “estimate” for when the units will be “substantially complete” according to [the developer’s] own opinion, and [the developer] ultimately did finish the units and schedule the closings within the time required by the agreements and upon proper notice. … Moreover, while the Purchasers all eventually notified [the developer] that they considered its failure to deliver the units by December 31, 2017, to be a default under the agreement, none of them claimed default or sought to enforce the agreements until April 2018 at the earliest, long after the original estimated date and after they had been informed that the estimated completion date had been changed. Thus, irrespective of the evidence supporting [the developer’s] claims of delays due to force majeure, the trial court could not find [the developer] in breach of a completion date that was purely estimated. 

Parque Towers, supra (citations omitted).

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.

 

MAKE SURE TO HAVE THE RIGHT WITNESS IN A CONSTRUCTION DEFECT CASE TESTIFY AS TO THE ESTIMATE

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In construction defect disputes, the plaintiff (or party proving the defect) oftentimes relies on an estimate instead of actual costs. The reason being is that the plaintiff is awaiting money from the dispute in order to fund the repairs.  I have previously discussed that there is nothing wrong with a plaintiff relying on an estimate to support its damages in a construction defect dispute.

 

However, it is important when relying on an estimate to ensure that you have the right person or expert testifying so that there is NOT an issue with that estimate being introduced as evidence during trial.  If the estimate forms the basis of your damages, you want to ensure that estimate is admissible evidence at trial.

 

Recently, I wrote an article about the application of the business records exception to the hearsay rule.  This article discussed a case where a plaintiff owner tried to introduce its estimate / damages through its architect.  The problem was that while the architect generated the repair scope of work (which is common), the architect did not generate the cost / pricing information.  Rather, the owner’s general contractor generated the cost estimate / pricing information with input from subcontractors (which is common).  Thus, the cost estimate / pricing information was hearsay as it pertained to the architect that was not properly admissible under the business records exception to the hearsay rule.  But, this evidence would likely be deemed admissible if the general contractor testified as to the cost estimate.

 

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.