a:\newslw.96 [4]Alan Lee MitchellStephen De'ak212000-10-12T01:38:00Z2006-07-01T22:27:00Z2006-07-01T22:27:00Z111456531 5415766111.8026 FURRER & SCOTT LLCConsider . . .VOL. 9, ISSUE 4 October, 2000Law OfficesFURRER & SCOTT LLC9185 SW BURNHAM ST. POST OFFICE BOX 23414TIGARD, OR 97223 TIGARD, OR 97281(503) 620-4540 -- (800) 334-8986 -- FAX: (503) 620-4315www.furrer-scott.comIS THERE ANY WAY OUT OF THAT ARBITRATION CLAUSE?Sometimes, you may want to avoid the application of a mandatory arbitration clause in a contract to which you are a party. While the general answer is you must engage in the arbitration, there are situations where you can avoid the clause.Construction lien claims are one area where there has been a great deal of litigation as to whether the lien claim is subject to mandatory contractual arbitration. For some parties, forcing the lien claim into arbitration can be a very important issue. Oregon courts have ruled both ways, depending on the facts of the particular case. In fact, the Hyundai project in Eugene has generated a substantial amount of litigation concerning this issue. At this time, there is no clear rule on this issue in Oregon.Another example is contracts that provide written warranties subject to the federal Magnuson-Moss Warranty Act. Under that Act, arbitration clauses that bar a plaintiff from a judicial remedy generally are not enforceable.Courts have similarly held that an arbitration agreement is not enforceable when the arbitration would not allow remedies otherwise available to the claimant. For example, arbitration may be avoidable if an employment discrimination statute allows statutory damages that are not otherwise available in an arbitration.In sum, you need to consider carefully before taking a position that a given dispute is or is not subject to arbitration under a contractual arbitration clause. This is yet another of those areas where you should consult with legal counsel before a dispute arises.DOES A NEW COMPANY RECEIVE A NEW CCB LICENSE NUMBER?If a contractor is licensed with the Construction Contractors Board as a sole proprietor and then changes to a corporation or an LLC, does the new entity have a new CCB license number? (Remember, the new business form is a separate legal entity. More on this issue in the January 2001 issue.)Even though there is a new separate and distinct entity, it may have the same number as the prior sole proprietor. Although the CCB OARs require that a new entity must “register anew,” the rules do not specify that the new entity must have a new CCB license number. See OAR 812-003-0000(3). In fact, the CCB takes a position that there is no bar to giving the new entity the same license number as the sole proprietor.This means that you could pull up the CCB license information on an entity that was formed in 1998 and learn that it had been “continuously registered since 1992.”As such, it is advisable to always call the Oregon Corporation Division to obtain its information about any entity. By cross-checking the information, you should obtain a fairly good snapshot of the licensing information for the entity.Of course, if you need further information, you may want to send a public records request to the CCB for the entire registration file for the specific CCB number. Note that the CCB will only accept written requests.DOES HAVING A CCB LICENSE NUMBER MEAN A COMPANY IS LICENSED?Just because someone has a CCB license number does not mean they are licensed.Recently, in checking on a company that has a CCB license number, I found that the entity’s license status was “Refused.” This means that the entity has never actually been licensed as a contractor in Oregon.In following up with the CCB, I found that a license number is issued to applicants before the license is approved as a “tracking” number. It is not until the agency actually approves the license application that the entity is actually a currently-licensed construction business.Again, until you determine that an entity’s license is current and valid, you should never assume that the existence of a CCB license number means that the entity is currently licensed or that it ever has been licensed. The CCB web site (www.ccb.state.or.us) now allows the public to access contractor licensing information.IF YOUR BIDDING SOFTWARE DOES NOT WORK, CAN YOU RECOVER DAMAGES?Most contractors use commercial software programs to prepare bids for construction projects. Like most people, contractors blindly trust that the software does not make arithmetic mistakes.A recent case in Washington illustrates that this can be an ill-placed trust.M.A. Mortenson Company used the Precision Bid Analysis software from Timberline Software to prepare a bid for a large medical center project in Seattle. After Mortenson was awarded the bid, it learned that its bid was $1.95 million lower than intended. When Mortenson found that the error was due to an alleged software malfunction, it sued Timberline Software.The Washington Supreme Court ruled that the “shrinkwrap” disclaimers were sufficient to protect Timberline Software from liability in this matter. M.A. Mortenson Co. v. Timberline Software Corp., 140 Wn2d 568 (2000).The court held that Mortenson’s purchase order did not include all terms of the parties’ agreement and that the shrinkwrap disclaimers that were delivered with the software became part of their agreement. The court also held that the fact Mortenson did not read the shrinkwrap disclaimers did not prevent Mortenson from being bound by those disclaimers.It is important to note that the court’s ruling was strictly on the legal issue of what information was included in the parties’ agreement. The court did not reach the factual issue of whether the software was actually defective.The lesson to be learned is that you should never assume that you are not bound by the “fine print” of an agreement. If you have any concerns about computer software or any other agreement, you should read the terms carefully before you accept the goods.(Note that accepting the goods can include any use by the purchaser that is inconsistent with the seller’s ownership. Acceptance can even include failing to tell the seller you don’t want them if this is not done within a reasonable time after you receive the goods.)CCB “HIGH POINTS” The latest version of the CCB’s administrative rules is dated August 24, 2000. Some of the recent changes reflect the new administrative law judge panel system initiated by the 1999 Oregon Legislature.FIRM NEWS:MICHAEL J. SCOTT and ALAN L. MITCHELL presented a September 14, 2000 half-day seminar on Oregon contract issues for the Eugene chapter of the National Electrical Contractors Association. MIKE and ALAN will present another half-day seminar in November for NECA on Oregon credit and collection issues.MICHAEL J. SCOTT, DOUGLAS R. HOOKLAND and ALAN L. MITCHELL will speak at a December 14, 2000 seminar in Portland for Lorman Business Seminars entitled “Oregon and Washington Construction Lien and Bond Law.” If you would like a brochure about the seminar, please contact Shari M. Persen at Furrer & Scott LLC.This newsletter is published quarterly by the law firm of Furrer & Scott LLC for the benefit of its clients and friends and is intended to inform them about legal matters of interest. While this information is meant to be current, we do not promise or guarantee that the information is correct, complete or up-to-date. This information is not intended to and should not be considered to provide legal advice or create an attorney-client relationship. No action should be undertaken in reliance hereon without professional legal counsel.Alan L. Mitchell, Editor