Bankrupt projects getting new owner... do we continue under same contract?
Bankrupt projects getting new owner... do we continue under same contract?
(OP)
This must have been a typical situation in the last few years with the economy rundown. A project is designed, construction starts, only 2 structural shells are constructed -Rc walkups- and the project goes bust and the bank takes it. There is no construction activity for 7 years or so and the bank sells the project to a new investor for pennies on the dollar....
And the construction code has also been revised in those years.... And I am not really interested with continuing with the project due to very disagreeable circumstances
with project.
So, suppose that my priorities and business has changed in those years, do I have a contractual obligation with the new party?
Thanks.
And the construction code has also been revised in those years.... And I am not really interested with continuing with the project due to very disagreeable circumstances
with project.
So, suppose that my priorities and business has changed in those years, do I have a contractual obligation with the new party?
Thanks.





RE: Bankrupt projects getting new owner... do we continue under same contract?
Mike McCann, PE, SE (WA)
RE: Bankrupt projects getting new owner... do we continue under same contract?
RE: Bankrupt projects getting new owner... do we continue under same contract?
My response was predicated on the assumption that the new owner wanted to continue the design relationship with the OP.
Of course both parties can just walk away should they desire, since, technically, there is no contract specifically between them. I am not a lawyer, but I would argue till the cows come home the legality of the clause you mention, and would have to check it out with a lawyer. Seems you would be obligating the new owner to a contract he has not agreed to and signed. Just does not feel right to me.
Mike McCann, PE, SE (WA)
RE: Bankrupt projects getting new owner... do we continue under same contract?
VYordan
RE: Bankrupt projects getting new owner... do we continue under same contract?
Not really, since the new owner, in doing their due diligence should have read the contracts currently in force and determined that they would be buying those contractual clauses as well. Typically, a purchaser buys assets and liabilities of the company being purchased. In the OP's example, it's unclear whether the bank actually bought the only the property or the business of the "project." In either case, one can probably argue that the contract is null and void, due to lack of continuity, and probably due to expiration of contractual time lines. I can't imagine anyone successfully arguing that a contract that has lapsed for 7 yrs is still valid and enforceable. If nothing else, the pricing for the work to be done could not possibly be expected to be valid after a 7-yr lapse.
TTFN

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RE: Bankrupt projects getting new owner... do we continue under same contract?
David Simpson, PE
MuleShoe Engineering
Law is the common force organized to act as an obstacle of injustice Frédéric Bastiat
RE: Bankrupt projects getting new owner... do we continue under same contract?
Dan - Owner
http://www.Hi-TecDesigns.com
RE: Bankrupt projects getting new owner... do we continue under same contract?
- If I want the work, this is "since the contract is still in force, our request is to provide clarity and further develop our working relationship."
- If I don't want the work, this is then "Given the delays and changing fundamental nature of the project we believe a new contract is required in order to coniltinue with the works."
I think many an engineer would be surprised how many clients will let you out of binding contract just because you ask/imply you want out. After all, who wants a Consultant who doesn't want to do the job?