Hello and good evening it’s Wednesday five o’clock.
My name is Seth smiley. I am here with the show see you in court on WGN so 990 A.
M and W GSO dot com if anybody wants to give us a call in they can do so on the on the listener number which is 5 0 4 5 5 6 9 6 9 6. Today we’re going to be talking all things law just like each and every week at this time.
Looks like today I have a number of different things that we’re going to be going over with regard. Still a lot of the stuff that I do from on a day to day basis dealing with construction and contracts and things like that. And some of the most highly litigated things going on with with with those types of agreements and so you know to that end it’s always one of those things where you know we welcome people to call in. They’re more than welcome to do so at the 5 0 4 5 5 6 9 6 9 6 number and then folks can always call in as well. At the 5 0 4 excuse me they can text in comments at the 5 0 4 5 7 9 8 9 8 5 just a little back up for everybody. My name is Seth smiley I am an attorney here in New Orleans Louisiana. I own a law firm called the smiley law firm. And in the intro talked about Smiley firm dot com that is our Web site. And if anybody wants to speak with me here on the air about any legal issues I’m happy to give you any general advice that I can offer out there. There’s there’s a bunch of different things in law that we do and there’s various things in law that we don’t do very much of. And so I can always point you to experts and different people along the way. And you know and help out with those situations so again my name is Seth smiley. This is see you in court.
And you know we’re going to be talking about various things from here to there especially today dealing with construction contracts. I deal primarily with prime contractor agreements with you know in between different parties on construction contracts I talk about these things from time to time all over the state. And so I have I have a deal coming up here in a couple of weeks that will be speaking to various engineers architects and those types of people about you know the nitty gritty with regards to construction contracts and so for those who don’t know it I mean we were all we all deal with contracts all day long every day. Everybody’s got a cell phone they’re in a contract. If they you know if you’re renting a place you know you’re involved with the contract even if it’s not written. There are no oral and verbal contracts in our society that happen all day. And so as long as somebody is doing something in exchange for something else then that is a contract. Most of the time it’s money but you know people can barter as well but to be you know if you’re going to go and you know you need something done you’re going to offer some money money to do it. And you’ve entered into a contract with them and we’re not necessarily going to go into how contract law works. If you want to know about all that you can go to law school. That’s one of the first classes that they they teach there. And the law of contracts which in Louisiana’s law of obligations.
And so basically we’re be talking about contracts between contractors subcontractors developers owners those types of things and different different contractual provisions within those contracts that are you know typically the most litigated provisions. So if anybody you know has any any any thoughts or issues on contracts that they are involved in or had some you know some scary stories or whatever. I mean we steal a lot most most contractual relationships you know go very peacefully. The reason why we have contracts I always tell people is because when it hits the fan you have to rely back on your contract to you know really really spell out all the all the law between the parties. So you know we have statutes that are in you know basically the law of the land. But then you can contract around a lot of things unless it’s you know unless it’s against public policy. And then and so the contract between the parties and it’s kind of odd. What we do because we deal with contract wars which are people who build buildings and they have contracts which are the papers. And so sometimes in our writing and things like that it’s kind of confusing when we’re talking about general contractors and their subcontractors. And then the contracts between those. And I wonder if I can say the word contract any more in that short short span of speaking. So it will do it.
The things that we deal with mostly are the agreements between the generals and the subs and so general contractor is the you know the main contractor who’s on a job it can be a small job you know but it’s one where there are multiple vocations involved so have an electrician and you have a plumber and you have a you know a roofer and a drywall guy and all these different things. Those are the individual subcontractors typically And then you have a main general contractor who oversees the work that they do and manages all of the various portions of the contract kind of it kind of Merry’s it all together. Lots of folks try to kind of play general contractor on their own and many times they can be very successful. It’s mostly about organization and coordination. And you obviously have to know something about the construction but then it can go awry and that can be very very very troublesome. And and the contractors you know there are licensing laws that kind of go against that. I mean if you own your own property you can kind of play general contractor.
But if you if you’re trying to do this for other people then that’s where they can have issues. So. So we’ll be talking about the agreements between those typically in our business we deal with a lot of form contracts. And so basically all that means is contracts that somebody downloads from off the Internet and then tailors them to their specific needs. We write a lot of custom contracts for my office for folks depending on you know if you’re a pool guy you have different issues than if you are a you know a landscaper or a roofer or something like that.
And so they tend to need to be tailored to your specific industry and your specific issues. So a lot of the industry standards that we see are typically AIAA. The American Institute of Architects that’s the basically the industry standard when it comes to construction contracts. We see those the most more than any and and it’s because they’re just you know they’re very very high quality. A lot of situations have been thought out and there are lots of forms that can they can you know help shorten a lot of the time that people need to be visiting with lawyers to make sure that their contracts are properly done. But if you live by the live by the form and also die by the form forms can also get you in trouble. So you want to be careful of all that. There are a couple of other popular sources out there for other than just Google. Lot of people just google contracts and they pull up things and kind of piecemeal them together we see a lot of that but there’s also a company called consensus docs and then there’s a HGC which is the American General Contractors Association. They they have a thing called DocI builder and the software that you can build your your contractural documents and save different ones that you’ve used in the past. And then engineers don’t don’t forget those guys.
They have a joint contract committee and it’s called the J. CDC and so there are various sources where people could get contracts and contracts you know like I said it’s the law between the parties and it’s it’s where you need a lawyer to help you out. It’s where you know it can save you an ounce of prevention is worth a pound of cure you can save tens of thousands or hundreds of thousands or lots of money at the end of a job. And so it’s very important to be able to get these to save time but then you need to make sure lawyer tailors that for your exact needs. So
and I apologize to everyone out there my voice is a little bit rough a little under the weather. And so hang on one second. And so from time to time I may have to offer something so I apologize for that already. So we’re leading into our hour for our first segment. We’re going to come back and talk a lot more about contracts hopefully about little special listeners that are still on Juden and Luke who are texting me and those are my sons and we’ll be back here after the break. We’ll see you in court. My name is Seth smiley and this is W. GSO 998.
All righty everybody welcome back. This is Seth smiley. We are on the second segment here on. See you in court.
GSO 998 am speaking Easy New Orleans style. The listener line is 5 4 5 5 6 9 6 9 6. If anybody wants to give a call. Be happy to talk with them about any legal issue that they have. You know we can we can go off topic if anybody wants to. Not a problem. Get some free general legal advice and then if anybody wants to text in way. I also have a text line it’s 5 4 5 7 9 8 9 8 5 and you can just shoot over your comments and we can read them on the air and talk legal issues around those and I have We’re talking about contracts here today and then in the next segment I’ll be kind of switching gears a hair just to talk about some of the things that we’ll be talking to some of the future shows.
So. So anyway back to the law of contract. It’s it’s just you know again whenever whenever folks come to me this is the first thing that we ask for we ask for invoices we ask for contracts we ask for proposals any of the documents that back up you know the construction work that was supposed to be going on and this involves all business promissory notes. You know just contracts with purchase orders in any type of business transaction requires a requires a contractual provision and so it’s the first place the parties to look.
And so there are a lot of commonly litigated contract provisions. And so this is what we’re going to be going into over the next couple of segments and we can’t quite get to everything during this show this is this is a topic I do for Seeley’s and things like that. But I’ll go over them briefly and then we’ll go into a couple of them a little bit more detail. And so the 14 most provisions that see the most scrutiny are you know it’s going to be pretty highly technical but it’s just one of those things. If anybody knows what’s going on or they have you know these types of contracts. If one of these issues comes up you need to go see your lawyer because the devil’s in the details as I say. So we have what’s called incorporation by reference clauses. That’s number one. Number two is scope of work provisions which is probably the biggest deal and all of in all of construction law. You know that’s that’s the actual work that’s supposed to be being performed. And then the next thing is change order and extra work provisions. That is the one that’s probably the most highly disputed and litigated and whatnot. So we’ll be talking about that probably the most here today there are notice provisions which are litigated indemnity clauses is a big deal it’s a hot button word that folks don’t always understand.
And I had a professor in law school who told me if there’s anything that you’re going to learn at subrogation an indemnity of the two words that we need to make sure we hang on to law school.
And I think he was being very simplistic because there was a lot more that we needed to hang onto from from our learnings in law school. So there are there are other clauses. Number six is no damages for delay clauses. Delays are huge in construction projects which leads us to the next one which are liquidated damages provisions LDS are very very popular for people to talk about and we nickname them LDS. Liquidated damages and I can talk about that a little bit more here soon. We have other provisions such as other or other clauses in contracts which are lien waivers. The infamous pay when paid versus pay if paid and that we will not talk about here today because it’s so highly technical it is make your eyes roll back in your head. Next we ever retained. That’s a that’s a big deal. That’s what that’s the money that’s held out from each payment during a job and then is the end when everything is either done right or not done right. It’s paid out or portions of it are paid out depending on what backed charges there are terminations provisions. Big deal. Not always are people terminated properly. And so that’s something that’s a hot button issue. ADR clauses is one of my favorites are you know have a deal with mediation and arbitration and how those are play out in the real world attorney’s fees provisions everybody loves our’n and then form selection and choice of law round out the list.
And so these are specific to construction law but many of them carry over to just general contract law not general contract or law. Just general in general the law of contracts. So. We’ll talk about a few of these in-depth in this segment and then a few more in the next and whatnot so if anybody wants to call in before we start you know kind of Mo through some of this.
The number is 5 4 5 5 6 9 6 9 6.
And again the text the text number for people to send the text in is 5 4 5 7 9 8 9 8 5. And so you can go ahead and put those out there and we can talk about that. So with regard to the different types of the different types of revisions that get the most scrutiny scope of work is a big one. And so anybody and everybody who deals with a contractor whether it be the plumber whether it be the age factor you know any any contractor that comes out to do any work at your house or on your building that should work anywhere they have a scope of work no matter what written or unwritten there’s a scope of work. And so some of the most conflicted or the biggest conflicts come with regards to that scope of work. OK. So I get these types of situations all the time. Oh the contractor you know I was hiring a reputable contractor and you know he painted my house and he you know he put a new roof on he did all these things and I just assumed that you know involved in that would be to make sure that the floors are properly taken care of. He scuffed up all my floors my views painting and doing the new roof and do whatever I could I wouldn’t think that a reputable contractor would leave a house in this situation or some sort of example like that. Right. So the first thing we do is we look at the scope of work what the scope work. Paint the walls put a new roof on. Right.
Whatever it is and has nothing to do with the floor has nothing to do with any other aspects. And so the people you know they’re just like well why didn’t he do that. Why didn’t he perform this work. And while it’s not it’s not the work is not actually in the contract. And the more specific the scope of work the better. Typically you know it doesn’t leave any wiggle room but the key is making sure that both sides understand exactly what the scope of work is and there needs to be you know what we call in a meeting of the minds. And so you know you want to make sure that everything is included within the scope of work that you know and then that the client really understands. And so a lot of times scope of work will be an attachment. They’ll be specifications or you know other other ways of really spelling out. Sometimes there are drawings that you know that show the scope of work and what each each contractor or subcontractor are supposed to be performing. And so scope of work is a big deal. Just make sure buys on the same page so that they know you know roofer comes along and you know agrees to replace the roof but not the gutters of the ridge caps or whatever else you know. And so we want to make sure that everybody’s on the same page and ahead of time leading into the project throughout the project and then at the end and then everybody typically ends up being happy.
So we see a lot of lot of disputes with regards to scope of work because a lot of times unsophisticated folks in construction or unsophisticated homeowners or whatever don’t don’t don’t really understand the full scope of work and they just kind of think that much more is supposed to be done and it is actually bid for. So that’s a big deal. And many times it leads into the next issue or or you know situation which has to do with with change orders. And so we’ll talk about change orders and extra work provisions coming back after the break here.
Again if anybody wants to call in 5 0 4 5 5 6 9 6 9 6 this is see you in court. My name is Seth smiley on W. GSO and GSO dot com. Thank you so much. All righty Welcome back. Great intro music coming back into this third segment out of four here on the bottom of the 5:00 hour 5 to 6 here on GSO. This is Seth smile. We are. See you in court. I was in the break House conversation with some attorneys here at the at the station. So it’s always always fun whenever you can get a couple of attorneys together tell them war stories. But. So anyway we’ll we’ll get back to the topic at hand and here in just a second. Coming up in some of the shows here here we’re going to be having here soon. It looks like we’re going to be talking about. I want to go a little bit more into personal injury issues and the coming shows to veer away some of them some of this some of the you know purely construction stuff that we talk about. And looks like we will be talking about some new auto safety technologies that can start saving lives into the future. And then another topic that will be going into is Louisiana auto accident forensics and what investigators actually do need to know to help protect your claim. Those are some of the things that we write about on our blog.
You can check it out at Smiley firm dot com slash blog or you know just go to the site and I’ll be much tabs there that you can check on and then going to see you know my firm and what we do and who we are and what we’re about. And you know we just just one quarter into this year actually April started in quarter two and it’s been a good year for us and be able to kind of reach back out in the community and give some things back. So there’s a lot of things going on here in south Louisiana and a lot of people are you know needs some help. So that’s one of the things we try to focus on is trying to give back to the community. And you know the law can be boring and you know talking about contracts and contractual provisions and all those types of things. But you know there’s a rhyme and reason to what we do. And so part of what we do is to try to help more people you know not only ourselves and our family the people that we work with and then also our clients and and everybody associated with that. So that’s one of the underlying themes of what I try to preach to to my my little congregation at my office. So anyway we’ll get back into the into the contractual provisions and we’ll start talking about change orders change orders are like I was telling earlier that that’s very they can be that first of all has two types.
They are like a change order that adds money to the contract which is just your typical change order. Normally everybody associated associated associates to change order with adding Williams I mean excuse me adding money. But it can also be a deductive change order which can take away from the final contract amount. So change orders are so you have your original contract in your original scope and that is basically what the work is starting out to being. But typically if you know you’re renovating a house or some big building or something like that or starting with a huge project stuff changes you know we’re all messy people life is messy. And so it’s very rare. Don’t you know you architects hold your ears. It’s very rare. Whenever things go exactly to plan and so you know there’s there’s a need to change things as we go where people you know you know my wife changes her clothes like four times before we go out to dinner. You know I always said there’s one constant in my house and that’s that my wife will always change her mind. And so the first decision typically will not be the last. And so it just it’s just the nature of the beast. And so in the construction they’ve created a thing called Change Order and basically it’s a little like addendum to the contract or an additional contract or whatever that will be it aids and you know making sure that the full scope of the work is modified and changed in order to reflect whether or not it’s the different work that’s in the contract. And so the issue becomes when ever you know we’ll get we’ll get homeowners that come in or we’ll get developers and things like that.
And they say hey you know we got three bids on this project. One guy came in real low and I think we’re going to end up going with it. And then you know six months a year later or whatever it is they say wow you know that guy came in low and then all of a sudden just bam bam bam bam bam change order after change after change order and then literally change order to death or whatnot. And then I’ve had him say you know tours and projects no more change orders which is kind of ridiculous because you know you got it you got to do what you got to do to get the job done. And sometimes there’s an absolute need for them but in other times the process is abused. So you have to be very careful in the law to make sure that you know that the change order process is followed typically. They need to be written change orders and you voted to authorize more work. A lot of times we get trouble where you know and going back to my wife but we just renovated a house and she loved and the contractors were there because she was like oh there’s some nice to me and I’m like well you know you’re you’re you’re nice looking. And not only that you keep telling me to do more stuff and doing more stuff is not free. And so they act like it’s free. But then later you know they either put it in writing or they put it on their invoice or they put it somewhere and it’s like boom boom boom all this extra stuff.
You thought they were doing just to be nice. They were actually charging you for. And those are typically how change orders work change orders are a big deal. And you know we could probably devote you know a entire show just to talking about change orders I wouldn’t have any listeners after that show. But you know it could. There’s definitely enough there’s enough information there to where it can be discussed in great detail. So you know the next the next thing on here that you know something that could potentially be talked about not in great detail but something that needs to be known as indemnity clauses. And so there’s typically. And to put it nicely on the radio stuff rolls downhill and indemnity clauses work typically owner developer has a contract with the general and then they have a clause in their contract saying that if the owner or if anything happens on the job the general contractor will indemnify the owner which basically means he’ll pay for his legal representation or if he gets any damages assessed against him. He the owner developer will have to pay it or go in the back of the GC. And so the general contractor when when he has contracts with subs he puts in indemnity clause in his contract and he says if anything goes wrong in the job if somebody gets hurt or the job burns down or whatever happens negatively then the subcontractor will indemnify the general contractor.
And so basically it’s a risk shifting provision and it allows for attorneys fees it allows for any damages or any any kind of money assessment against the party higher on the hierarchy or further up the chain of command than the lower wrong party will then have to bear the burden on his back of that risk which these are the powerful provision. And I mean we’ve as a law firm and with our clients I mean we’ve benefited from some indemnity provisions which have saved my clients tons and tons and tons of money. Most insurance contracts have a lot of indemnity in them and so surety companies will come along and you know there they are they have indemnity clauses with the people that they are that that are there the surety for and so are the entities and the indemnity was picked up by one of the parties involved. And so it’s possible you could be a general contractor and you’re paying for the damages and the attorney’s fees and the costs of like three or four different parties. And so you will see that will represent a loss. And so we will use things like that to put pressure on generals and things like that so that they will be kind of squeezed into paying a lot more and a lot faster and a lot more efficiently.
So indemnity clauses are a big deal and it’s one of those things that’s just not unlike an every day one or two page contract. It’s one of those things it’s like a 10 page contract or more. And it’s very very important. It can shift a lot of risk and it can be you know it can mean the difference between profitability and bankruptcy for some for some construction companies. So it’s a big deal. And then other other provisions you know we could talk about here quickly. The no damages for delay clauses are liquidated damages elde oldies are removed or clauses that are put in and in the beginning of the contract and they they basically are stipulated damages they say in the beginning of a job folks say OK you know if this thing goes long we don’t know exactly what the damages will be but we can guess approximately what they’re going to be if it’s you know $500 a day at 0 0 0 0 a day 10000 a day whatever it is. And then if you run over instead of us trying to calculate all the damages we’re just going to assess you this one damage which is the liquidated damages clause provision. And so that’s a big big tool at the end of jobs to get people you know once a job is running late and it’s going over time you can really hold some leverage over subs. Different parties with liquidated damages clause. We’ve had some big projects here in the city recently and you know liquidated damages that were running on those things were were massive amounts.
And so the owner can choose to forgive some of those. But it’s great great leverage in you know in a way to you know you can hold something over a year and you know as the owner of the general contractors had and then the different subs and then their suppliers and all kinds of different things if something is late because of one specific party you can typically hold that over their head. So we’ll finish talking about contracts here in the next final segment. My name’s sets Vialli. This is see you in court and we will be back here in just a minute on GSO 990 AM.
Thank you so much. All righty everybody. Welcome back. This WGA has over 990 AM My name is Seth smiley. We’re here with. See you in court. Looks like if folks want to give us a call and just chat about anything having new legal here on this final segment in the drive time our 5:55 here on Wednesdays. The listener numbers 5 0 4 5 5 6 9 6 9 6 5 0 4 5 5 6 9 6 9 6.
We can also text in any comments of 5 0 4 5 7 9 8 9 8 5 and you know before we jump back into contracts.
I deal with various things as being a business owner and you know we have lots of different issues and lots of different issues going on here in the city and so I try to stay on top of all the various technologies that we have at our fingertips and one of the things we’d like to do in my office or I’d like to do is I’d like to try to run as an efficient office as possible because I think that that adds more to the client value. And so I’m constantly looking for new software and implementing new software. And so most lawyers don’t really think about that. And day to day in their practice and so I have the luxury to be able to deal with that a lot. And so if anybody you know ever ever wants to talk business or talk you know different softwares or things that help run businesses that’s a little bit not you know see you in court ish. But there are lots of legal implications to things like that. And as a lawyer and a law firm we have to buy into certain softwares that have certain types of protections you know hiper compliance and things like that. So I have a vast knowledge on those types of things and and just various business efficiencies and whatnot. So if anybody ever wants to call and talk about that more than welcome and then you know one of these days we’ll get back to no talking about the different the different things that are going on locally and nationally.
It’s it’s just it’s been a little bit slow from what I’ve been following and so I figured I would take the time to go to go into more details on you know what exactly we do we end up doing transcripts of these recordings and we post them on our on our Web site so that you know we can have the written versions and also the audio versions for folks that everyone listen to it again and then it’s also on WGA. So dotcom. So if anybody wants to check this out streaming you know worldwide on WGA. So dotcom they’re more than welcome.
So we’ve been talking during the show about the contractual relationship between contractors again just said the word contract a bunch in one small segment and you know again the law between the parties I’ll say that over and over and over again. But there are various ones that we’re talking about change orders previously in the next couple that will you know briefly talk about and then go a little more detail how do they lean waivers. There’s pay when paid clauses pay if paid there’s retain edge termination provisions ADR attorneys fees revisions and foreign selection. Choice of law forms the election choice. The law is basically in most contracts they put in where if a dispute arises where the specific area of the world where the where you know you can either sue somebody or the laws that apply. Now if I’m in Louisiana and I’m dealing with Louisiana person then on the other side of the contract I can’t necessarily say that we’ll all disputes will be handled in China. It will probably be thrown out. And so it has to be somewhat reasonable. But if you’re based out of a certain area you know if I’m if I’m located of folks will do things like if they’re based out of St. Tammany Parish and they do a lot of work here in the city they’ll put a form selection clause that makes it to where all disputes have to be handled in St. Tammany Parish which if anybody knows anything about the law the different we divide all our judicial districts by parish. OK so Jefferson Parish has its own main courthouses in Gretna.
If some some smaller courthouses all around Orleans has its own own loyal and Poydras is the main courthouse right next to the city hall and then you know St. Tammany Parish St. Bernard Parish all all the local municipalities each parish has their own. And and so that actually is very important with regard to construction and law sure. Some parishes typically are more conservative than others and others tend to have a reputation to be more liberal. And that that plays out a lot. Whenever you’re dealing with disputes between people and insurance companies and various entities somebody gets in an accident in St. Tammany Parish and it’s it’s you know might be one that’s kind of questionable whether or not you know liability and injuries and all those types of things. St. Tammany is not one of the parishes where you want to push that because they tend to be more conservative whereas Orleans is the complete opposite and so there are lots of guys who love love like you know getting cases that happened in Orleans Parish because they tend to be a little bit more plain and friendly. Now whether or not that’s good or bad you know it is what it is but the law should be what the law is and say what it says and everybody should have the same type of rules. But it does vary from municipality to I mean from jurisdiction to jurisdiction from parish to parish. So that has to do with form selection. We won’t get into the intricacies of lien waivers or pay when paid versus pay if paid retainer It is a big deal.
It probably is not as big a deal to the everyday consumer but in bigger construction projects retaining edge is everything. I always say some of the biggest contract you know the biggest construction companies in town and the biggest buildings that they own the real draw down the interstate and you’ll see big names on the side of the road or you’ll drive them prominent streets and you’ll see you know so and so contracter whatever average Joe can say. You know those buildings were built with retain edge and so it’s basically either you know a 5 percent or 10 percent or 15 percent of the each payment that’s suppose to be paid down to a sub is withheld and that number is agreed to in the beginning of the contract. And so person is pretty average. And so you know if you have $100000 contract and you’re paying in four installments of 25000 and you’re in a hole with 10 percent retained edge that means that you’re going to be holding twenty five hundred dollars out on each payment. So two of the 25000 they only get paid 4:38 and then at the end of the job there’s this one two three four $10000 Etain you’re just being held and many times the GC or whatever will come back and say well you know this I wasn’t dotted this wasn’t cross this ditch wasn’t dug this you know tile was loose. This paint was wrong on the other end. They they back charge the sub for all these different amounts and somehow lo and behold there’s ten thousand dollars worth the bank charges or whatnot. And so that’s money that a lot of SUVs will leave on the table because they know it’s not worth it to go fight it. And you know they just keep moving ahead.
Now it’s really big money they’ll go fight it or you know they’re if they’re much more established they’ll go fight it. But retain it is a hot button issue and it’s often used to you know kind of hanging over the head of SUVs so that they can it was originally designed so that a contractor would hope with all these payments.
And at the end they’re in the punch list time which is you know when all the little things need to be tightened up the carrot in front of the in front of the contractor would be this retain his money. And so he would the job could be rendered substantially complete but he still hasn’t gotten his retain his money. And so he needs to go out finish everything before he gets paid his retain it. So that’s a big deal in construction something we deal with all the time. And you know there’s various other things from here to there but it looks like we’re running short on time. So this is you know this is see you in court. My name is Seth smiley. We can talk plenty more about construction and various personal injury and other other areas of law on the next show here on GSO and GSO dot com next Wednesday from five to six. And again Seth smiley smiley law firm Thank you.
See you next week.
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