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Frontier Sensibilities and Difficult Times-Part I

by | Nov 15, 2021 | Firm News |

From the outset entering these Borderlands meant encountering the perils of hostile confrontations to settle the question of who would remain to occupy these lands. The arrival of the Fort, military force, and law in time determined the outcome and created new opportunities for those who stayed on to forge a new life.  The physical presence of that military fort has passed into history and distant memory. What endures today is our system of government, the rule of law, and a frontier sensibility about how to carry on during difficult and unsettled times.

Post-Covid and all of the disruption and uncertainty it brought, the construction industry now faces shortages, rising costs for materials and labor, supply chain disruptions, and ever-shifting government regulations. All of these take their toll on all parties involved- lenders, owners, and contractors- alike. As construction lawyers, we are being called upon to review and revise lending documents and construction contracts and advise clients on how to minimize, if not eliminate, the risk attendant to all of these new circumstances. In some instances, some think that the best way to do this is by shifting as much risk to other parties as the law and the other parties will allow.

As is almost always the case, the parties negotiating contracts are in an unequal bargaining position. For example, one party may have economic, cultural, or language disadvantages or not have access to lawyers. So, it would appear that this places the weaker party in a very precarious position.  And it would also seem that this should lead to the stronger party prevailing by preying on the weaker one. This Hobbesian vision of the construction industry is the subject of numerous seminars and legal articles of late warning that untold dangers await unwary contractors venturing into these Borderlands, especially now during these difficult times.

But our own experience tells us that is not necessarily so.  Especially now during these difficult times.

Lenders are not hamstringing their clients and contractors with inflexible lending agreements.  Owners are working with contractors who are still delivering projects even in this climate filled with uncertainty. Contractors still push down risks to lower-tier contractors but work harder with them to avoid the risk of default, if for no other reason than to avoid incurring higher costs themselves. Lower tier contractors, often with the most significant disadvantages in any contract negotiations, are working and thriving.

This is true because individuals who understand construction know that their success is inextricably interconnected and dependent upon the success of the other parties. And lawyers who understand construction law know that they best serve their clients when they utilize their skills and experience to work out solutions with the other parties to solve complex issues that we are all confronting. Anyone who would enter these Borderlands and pursue only their narrow self-interest at the expense of others will find that they will not succeed in the long run.

I submit that we are witnessing in these Borderlands a frontier sensibility shared throughout West Texas. That sensibility is that if you enter into these Borderlands and want to survive, you must be self-reliant and willing to look not only to your interests but the interests of others, work together, and lend a hand if necessary. Otherwise, yes, this may well be a very perilous place for you.

Contracts are important. All parties will resort to the law to protect their interests. You must know the law and protect yourself. Such banal observations are valid even if uninteresting. But I submit that is not what is getting construction done. A frontier sensibility speaks to survival and even prosperity during difficult times. That legacy abides in these Borderlands today. It informs how we conduct our lives and our businesses today and has allowed us to move forward during these difficult times, especially during these difficult times.