PUNCH ME OUT . . . PLEASE

1. Introduction
1. Punchlist Process and Substantial Completion in Standard Form Contracts
2. Common Factual and Legal Issues Surrounding Punchlist Disputes
1. Defining "Ready for Intended Use"
2. Rejection of Work Under "Satisfaction" Clauses
3. Defective Specifications and Hyper-inspection
4. Owner Occupancy Impacting Punchlist Performance
5. Warranty vs . Punchlist?
6. Liquidated Damages on Final Completion and Right to Perform Punchlist
3. Lessons Learned From a Contractor's Perspective
4. Conclusion

The ideal approach to the punchlist process depends on the scope and complexity of the project and the contractual implications of final acceptance to the owner and the contractor. The architect, engineers, construction manager-agent, general contractor, and most of the subcontractors all have a role to play to achieve final acceptance and payment in a relatively short amount of time. Unfortunately, the roles and responsibilities of the various players in the final acceptance process are inconsistent among the industry standard formal contracts and the FAR. Perhaps more importantly, the language in standard form contracts usually is inadequate to establish clear expectations of the parties regarding the timing and resources required for the punchlist process. If the parties fail to establish a mutually agreeable process well in advance, punchlist and final acceptance can ruin a successful project and ruin valuable relationships.

The purpose of this paper is to generally describe the punchlist and final acceptance process and discuss some of the legal issues that arise when a dispute arises during the process.

The punchlist process occurs on every construction project when valuable resources are tied up so that the Contractor can receive payment for work already earned. If disputes occur at this stage of the project, they are very difficult to resolve because they tend to be muddied by other issues, which even further protracts the process of acceptance. Likewise, the Owner only wants to the Contractor to complete the project and get out of his way. Even with all of this risk associated with the punchlist process, it is one of the least planned and poorly executed phases of most construction projects. Understanding the contractutal roles and responsibilities in the process is the first step. With the investment of relatively little time early in the project to define and communicate the parties' expectations and dedicate the necessary resources to the punchlist, these problems usually can be avoided.

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