The Whiting-Turner Contracting Co. v. 250 Fourth Development CA1/5

BACKGROUND

A.

In August 2015, 250 Fourth entered a $36 million “Guaranteed Maximum Price” agreement with Whiting-Turner to construct a twelve-story hotel in San Francisco. The hotel was intended to be a Virgin brand hotel on completion.

The construction contract primarily consists of two parts: (1) a modified “AIA Document A102-2007 Standard Form of Agreement Between Owner and Contractor where the basis of payment is the Cost of the Work Plus a Fee with a Guaranteed Maximum Price”; and (2) a modified “AIA Document A201-2007 General Conditions of the Contract for Construction.”

The contract required completion of the work by Whiting- Turner for the “Cost of the Work” plus a 3 percent fee—but not more than the agreed upon maximum price, subject to adjustments by change order. In the event of a dispute between 250 Fourth and Whiting-Turner, Whiting-Turner was generally obligated—subject to exceptions found in section 9.7 and article 14 of the General Conditions—to continue performance pending final resolution of its claim.

The contract required that the project be completed by May 10, 2017 and provided that 250 Fourth was entitled to liquidated

2250 Fourth and Virgin Hotels…