From the Nichiha installation instructions: (place cursor over link, right click, select 'Open in New Window')
http://www.nichiha.com/pdf/Installation ... R05.13.pdf On the first page below Fig. 1: (underlining and bold are mine)
- When installing Sierra Premium Shake and Smooth boards,
it is recommended that an APA rated 7/16” OSB or plywood sheathing be used.
Boards may be installed over non-structural sheathing such as foam, fiber builder board, and gypsum type panels. Non-structural sheathing thickness should not exceed 1”.
Due to the compressive nature of some non-structural sheathings, care must be taken not to overdrive the fastener and compress the sheathing. The fastener length must be increased by the thickness of the non structural sheathing.
The above installation guide also refers to the general installation guide:
http://www.nichiha.com/pdf/Installation ... 007.08.pdfThis again refers to the use of "Ensure that an APA rated 7/16" OSB (oriented strand board) or 1/2" plywood is used."
Thus, while foam "may be" used, they highly recommend the use of a structural sheathing.
The first contractor "should have" - for good workmanship - shimmed the studs which were not in-plane with each other to make a straight in-plane wall to install the siding on. Most installation instructions state that the installing contractor is responsible for accepting the surface on which their installation goes or bringing it to the attention of responsible parties to address before installing their product, not afterward.