Sunday, July 15, 2012

Final Acceptance of Work on a Construction Project - Implications - Part 3 of 5

In certain cases, final acceptance can mean that the owner has acknowledged that the work met the requirements of the plans and specifications, barring the owner from later asserting differently. In an Ohio case, Beasley v. Monoko, Inc., 958 N.E.2d 1003 (Ohio App. 10th Dist. 2011), the Ohio Department of Transportation (“ODOT”) made final inspections and acknowledged final acceptance of work on a bridge painting contract. ODOT then made final payment to the contractor. Several years later, post-completion inspections connected with a statewide highway contractor kickback investigation, revealed that the original painting work had not been performed correctly. ODOT then sued the contractor arguing that its acceptance ODOT then sued the contractor arguing that its acceptance of the work did not mean that ODOT could not demand full compliance with the plans and specifications. The contractor argued that ODOT’s final inspection and acceptance of the work precluded all subsequent allegations that the work was not performed properly. The court relied on the common law and on specific language in the contract and found ODOT’s formal acceptance of the work was a legal acknowledgement that the work met the requirements of the plans and specifications. The court cited the following contract language:
This contract will be considered complete when all work has been completed and the final inspection made, the work accepted and the final estimate approved, in writing by the director. The Contractor will then be released from further obligations except as set forth in his bond.

The quoted language indicated that “final acceptance” was effectively a final acknowledgement of contract compliance and thus precluded any subsequent arguments that the contractor had not performed properly. The court therefore dismissed all claims against the contractor.

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