Because I’m at least partially a North Carolina country boy, I like to promise I’ll finish a project by a certain date “god willing and the creek don’t rise.”
I never give much thought to what I’ll do if the unexpected happens. I assume most people don’t. They expect things to go according to plan. As Meridian Engineering Company found out at the U.S. Court of Federal Claims recently, sorting it out when things don’t go to plan can be a long and arduous process.
The Government improperly threatened to terminate a contractor for default, because there was no good reason to believe the contractor had actually defaulted.
In a fascinating new decision by the Armed Services Board of Contract Appeals, the Government’s threat–made to a contractor with cash-flow issues–amounted to coercion, and invalidated a settlement agreement that awarded the contractor much less than it probably should have received.
I recall sitting in a mediation one day when the mediator, a judge, told me and my client that we all have lightning in our fingers. He went on to explain that this means, once you sign a contract, it’s like magic in the sense that you can’t get out of the contract and are bound by it, absent certain exceptional circumstances.
I was reminded of this concept while reading a recent opinion from the Armed Services Board of Contract Appeals that dealt with the effect of a contractor signing a release with the government and then trying to back out of that release by refusing payment from the government.