Michigan Laws 125.1592 – Improvement contract exceeding $75,000; provisions
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A contract between a contractor and a governmental entity for an improvement that exceeds $75,000.00 shall contain all of the following provisions:
(a) That if a contractor discovers 1 or both of the following physical conditions of the surface or subsurface at the improvement site, before disturbing the physical condition, the contractor shall promptly notify the governmental entity of the physical condition in writing:
Terms Used In Michigan Laws 125.1592
- Contract: A legal written agreement that becomes binding when signed.
- Contractor: means a person who contracts with a governmental entity to improve real property or perform or manage construction services. See Michigan Laws 125.1591
- Equitable: Pertaining to civil suits in "equity" rather than in "law." In English legal history, the courts of "law" could order the payment of damages and could afford no other remedy. See damages. A separate court of "equity" could order someone to do something or to cease to do something. See, e.g., injunction. In American jurisprudence, the federal courts have both legal and equitable power, but the distinction is still an important one. For example, a trial by jury is normally available in "law" cases but not in "equity" cases. Source: U.S. Courts
- Governmental entity: means the state, a county, city, township, village, public educational institution, or any political subdivision thereof. See Michigan Laws 125.1591
- Improvement: includes , but is not limited to, all or any part of any building, structure, erection, alteration, demolition, excavation, clearing, grading, filling, landscaping, trees, shrubbery, driveways, and roadways on real property. See Michigan Laws 125.1591
- in writing: shall be construed to include printing, engraving, and lithographing; except that if the written signature of a person is required by law, the signature shall be the proper handwriting of the person or, if the person is unable to write, the person's proper mark, which may be, unless otherwise expressly prohibited by law, a clear and classifiable fingerprint of the person made with ink or another substance. See Michigan Laws 8.3q
(i) A subsurface or a latent physical condition at the site is differing materially from those indicated in the improvement contract.
(ii) An unknown physical condition at the site is of an unusual nature differing materially from those ordinarily encountered and generally recognized as inhering in work of the character provided for in the improvement contract.
(b) That if the governmental entity receives a notice under subdivision (a), the governmental entity shall promptly investigate the physical condition.
(c) That if the governmental entity determines that the physical conditions do materially differ and will cause an increase or decrease in costs or additional time needed to perform the contract, the governmental entity’s determination shall be made in writing and an equitable adjustment shall be made and the contract modified in writing accordingly.
(d) That the contractor cannot make a claim for additional costs or time because of a physical condition unless the contractor has complied with the notice requirements of subdivision (a). The governmental entity may extend the time required for notice under subdivision (a).
(e) That the contractor cannot make a claim for an adjustment under the contract after the contractor has received the final payment under the contract.