Contract Analysis Paper

Contract Analysis Paper

Nature of the Assignment: Set out below is information relating to a retaining wall construction project to be completed for property owners John and Mary Jones by Swift Stonescaping L.L.C. (owned by Jack and Sharon Swift).  A contract is expected to be written for this project.  The information below raises at least 8 concerns John and Mary Jones have about the project and at least 8 concerns Jack Swift has about the the project.  From these 16 or more concerns, you should select five for your analysis in a paper no more than 3 pages in length.

You should should approach this writing assignment as if you are the attorney writing the contract and who is trying to address the concerns of your client.  Since you can pick your required 5 concerns from both parties, this means you may be writing as if you represent John and Mary Jones for one concern, and then be writing as if you represent Swift Stonescaping for the next concern.  Always write on each of the 5 concerns you select as if you are representing the party who has the concern.

For each concern analyzed, you should address the following:

•     State the concern you are analyzing in clear terms.
•     Is this a legitimate concern that needs to be addressed in the contract, or is it a “needless worry” that can be addressed by the client without writing it in the contract?  If it is a needless worry, explain how you would advise your client to resolve it.
•    If the concern needs to be addressed in the contract, list all options you see in resolving it, and explain which option you think is best and why.
•    Explain where in the contract this concern should be addressed.
•    Provide actual contract language to resolve the concern which you write or modify from form language you have “found.”  You must identify source of any language you have “found.”
•    You must also draft language to address concerns you think need not be addressed in the contract, because sometimes your client will insist such language be in the contract.

Two cautions:

•    This is not a group project.  You may not work together in analyzing the concerns or drafting proposed contract language.  If I think two papers are “too similar” in discussing and/or resolving a concern, I will deduct points.
•    Not all of the 16+ concerns are of equal complexity.  To the extent that you choose only the more easily resolved concerns, and avoid the more complex concerns, your overall grade will adjusted downward.

Retaining Wall Contract Facts

The Essential Jones Facts:  John and Mary Jones, a retired married couple, live in Grand Lakes, Missouri in an upscale ranch, with walk out basement, brick front home on one of the town’s numerous, subdivision created lakes, called Mirror Lake.  In fact, their home is at the end of one of the arms of Mirror Lake so a natural drainage ditch runs across the back of their property taking rain and runoff water into the lake.

Mary Jones is a retired real estate broker into decorating and the inside of the house could be featured in Midwest Living.  She doesn’t like messes and wants their home at all times to have “curb appeal.”  John Jones is farm boy turned perennial gardener, who is 16 years into a five year project to landscape the back part of the lot by making the drainage ditch look like a natural stream using loose stacked natural brown stone.  He has completed the western 50 feet of the ditch, but the eastern 50 feet is more complicated.  Their property drops steeply down to the ditch and also drops sharply from the east side of the house until it reaches the boundary line with home next door.

A few years ago, the couple had two retaining walls constructed: One large, L shaped 4-5 foot high wall at the northeast corner of the house with the long side of the L running a few feet from the back (north) side of the house,  and  a second 2 foot wall 32 foot in length running parallel to the long side of the L but further down the slope to the drainage ditch.  John Jones describes this project his nightmare that was bid at $7,000 and actually cost $10,000.  This time he wants a contract.

The New Wall: John Jones wants to “kill two birds with one stone” with this new retaining wall.  He wants another retaining wall 30 inches high and 46 feet long below and slightly diagonal to his existing 32 foot wall.  Slightly diagonal so it follows the natural direction of the drainage ditch and will serve as one side of the the ditch.  This 46 foot wall will be connected to both ends of the 32 foot wall by two side walls that go up hill: The east side wall will be 13 feet long and the west side wall will be 5 feet long. Also the existing 32 foot wall will be extended 3 feet on the east end and 1.5 feet on the west end to make the connection.  The resulting enclosure (36.5x5x46x13) will look like a triangle with one point cut off.  The area is currently a sloped perennial flower bed which will now be level.  On the northeast corner, there will be a square, decorative pillar rising about 1 foot above the wall with a capstone. This pillar will be 20 inches square, matching the  pillar at the corner of the existing L retaining wall.

The Materials:  The new wall will be constructed of manufactured stone like concrete blocks manufactured by Versa-Loc and sold locally by Midwest Block and Brick Co.  The particular pattern is called Weathered Bethany Ledge.  Three sizes of blocks are to be used: 8”x8”x16” and 8”x8”x8” are manufactured by Versa-Loc and a third, 8”x8”x12” must be created  by Midwest by cutting the 16” block.  The 4” scrap piece from the cut will also be used as needed. The walls will be capped with 16” concrete capstones 4” thick.

Material costs:
16” block: $6 ea., 8” block: $3 each, cap block: $4 each, plastic pegs to lock the blocks together: 10 cents each, Decorative Cap for pillar: $35.

Also the bottom block must be set fully below grown level (recommended that the wall hight be 10% below ground level) and set in chat mix costing $25 a ton.  It will be necessary to use one layer of mesh on the 46 foot wall costing $65 for a 50 foot roll.  This mesh is buried and help hold the wall in place. Of course there will be delivery charges from Midwest that cannot be determined.  Midwest states that generally the cost of the blocks run about $9 per square foot.  John Jones wants the top 12 inches of this new flower bed to be a mix of top soil and sand.  Top Soil is $90 per load and sand $50 per load.

The Essential Swift Facts:  John Jones has accepted Jack Swift’s $6,400 oral bid to build this new wall.  Jack Swift, nick named Swift Jack by his crew, is the owner with his wife Sharon of Swift Stonescaping, L.L.C.  He has been in business three years after 13 years as a crew boss with a similar company that went out of business in 2010.  He has two crews of 5 men each: one crew boss at $30 per hour, two skilled workers at $20 per hour and two laborers at $10 each.  He has agreed to handle the purchase of the materials from Midwest, but gets no break in the costs as Midwest has gone to one pricing for all.  He will handle the removal of excess clay and the placement of the top soil/sand mix, but wants to subcontract this part.  The new wall site is 100 feet downhill from the front driveway and he wants to use a small skid loader type of machine to move the blocks to the back, but is concerned with the double slope on the side of the house.

He eyeballed the job at $6,500. Six days for one crew at $2500 and $2500 for materials, plus $300 to handle the topsoil/sand and clay removal and $200 to get the blocks to the back yard. That leaves him $1000 profit and maybe more if he has over estimated the materials or can finish in five days.

John, Mary and Jack’s Concerns:
•    John is concerned his existing walls are beginning to sag in places as their foundation was not sufficient enough.  John currently has white limestone rock where he wants the new wall and has agreed to move it and the plants in the area before the work begins.  He wants Jack to dig a deeper footing and put the limestone rock below the chat and buried first row of blocks.
•    Mary wants the job to start and end on time and all the the damaged lawn to reseeded and excess material removed.  The work is currently scheduled for the first full week of August 2014.
•    Jack wonders if John will have his rock and flowers moved on time or if his crew will walk into John’s half finish mess.  He also doesn’t know if he can commit to Mary’s start date because he does not know at this time what other projects he will get in late July.

Other Concerns Privately Communicated to You

After obtaining the basic information stated above, you call each party in preparing to draft a contract.  You learn the follow in confidential information:

What John Jones Tells His Attorney

When John Jones talks with his attorney, he tells him some very interesting information:

•    John remembers Jack Swift as Swift was one of the crew bosses when John had the previous walls built, and was in fact was the only one who was responsive to his requests and who seemed to care about the quality of the work.  John doesn’t think Swift remembers him; these crews do so many jobs, and he doesn’t plan to say anything until the job is done, but he plans to hire Swift to fix the sags in the previous walls if this job goes well.  He does, however, want language in this contract that Swift will come back and correct any sags that show up within one year.

•    John just had a underground sprinkler system installed last summer; what a mess that was.  He is really nervous about Swift using a skid loader to haul all the materials across the side yard, as he doesn’t want any sprinkler heads crushed and is willing to mark them.  More important, he doesn’t want the weight to crack any of the sprinkler system pipes and he doesn’t remember exactly where those pipes are.  He hasn’t said any thing to Swift as he thinks the sprinkler system is kind of obvious, but he wants you to put something in the contract to protect him.

•    Also, the fewer trips across the yard the better, he wants language language to say every trip to bring materials to the side should have a load of excess clay on the return trip to the drive.  And John tells you he hates subcontractors ever since on the previous retaining wall project, the knuckle head hot rod running a bobcat bringing the top soil to the walls grazed his air conditioner and took out an apple tree sapling he had planted. He never did get reimbursed.  John tells you he want some control over who the subs are and wants to be paid for any damage.

•    John tells you things have not been going so well between Mary and him since he retired, and in fact, on three occasions she has left for a few days.  He certainly can’t go through with this project if they separate and that’s the real reason he hired you.  He needs an escape clause from this contract if the wheels fall off his marriage.  Wow, you didn’t see this coming!

What Jack Swift Tells His Attorney

When Jack Swift talks with his attorney, he tells him some very interesting information:

•    Jack remembers John Jones from Jones’ previous retaining wall project, as Jack was one of two crew bosses on the job before he went into business for himself.  He thinks Jones doesn’t remember him and he wants to keep it that way.  Jones was outside very day trying to supervise the crew himself and making all kinds of changes.  Jack definitely wants all change requests to come through him and subject to an additional fee.

•    Jack thinks Jones is a fool for making the 46 foot wall the side of the drainage ditch.  There’s no way that wall won’t sag with all that water running against it, Yet he didn’t say this to Jones because he needs the work.  He’ll do a deeper footing, but absolutely no guarantees on sagging.

•    Things has been really tight financially for Jack because the long winter with all the snow have kept his early spring projects nonexistent. Though Jack had liability insurance when he bid the job, he let it lapse this week, and really needs at least a $600 deposit, which he is  going to use to reinstate the insurance.

•    Jack says he really can’t afford you to be writing an individual contract each time he has a difficult client, and in fact, he wants you to make this a standard form contract he can use over and over again.  He wants all the project details on a Project Description page and then just refer to “the Project” everywhere else.  Wow, you didn’t see this coming!