NY Court Disallows Recovery For Additional Work Performed Pursuant To Oral Modification Because Contract Required Written Change Orders

Charles T. Driscoll Masonry Reconstruction Co., Inc. v. County of Ulster
2007 N.Y. App. Div. LEXIS 6068 (N.Y. App. Div., May 17, 2007)

The Appellate Division of the Supreme Court of New York held that a construction contract must be enforced according to its terms and, therefore, oral modifications of an agreement which specifically calls for modifications to be in writing will be unenforceable. Although recognizing that written modification clauses may be waived based upon the conduct of the parties, the court found that the conduct of the parties in this case did not support a waiver. Continue reading “NY Court Disallows Recovery For Additional Work Performed Pursuant To Oral Modification Because Contract Required Written Change Orders”

Tenth Circuit Holds Supplier Delay Does Not Excuse Contractor Delay Under Force Majeure Clause; Holds Liquidated Damages Provision Allows For Apportionment Of Damages Where Owner Responsible for Some Delays

Hutton Contacting Company, Inc. v. City of Coffeyville
2007 U.S. App. LEXIS 9914, (10th Cir., April 30, 2007)

Contractor contracted to construct power and fiber-optic lines for the City. Upon completion of the project, the City refused to pay the final balance of the contract price, claiming that it was entitled to the funds as liquidated damages because the project was not completed on time. The Contractor sued to obtain the unpaid contract balance. The trial court ordered the City to pay the Contractor the retainage due minus $85,000 in liquidated damages. On appeal, the United States Court of Appeals for the Tenth Circuit, applying Kansas law, considered: 1) whether the contract’s force-majeure clause excused the Contractor for delays caused by late deliveries from its pole supplier; 2) whether the contract’s liquidated-damages provision was enforceable; and 3) whether the contract’s liquidated damages provision allowed the District Court to apportion delays between the Contractor and the City. Continue reading “Tenth Circuit Holds Supplier Delay Does Not Excuse Contractor Delay Under Force Majeure Clause; Holds Liquidated Damages Provision Allows For Apportionment Of Damages Where Owner Responsible for Some Delays”

NY District Court Enforces Liquidating Agreement Between Owner And Surety That Permitted Owner To Retain Recovery Obtained From Third Party To Satisfy Owner’s Claim For Damages Against Surety

Menorah Home and Hosp. for the Aged and Infirm v. Fireman’s Fund Ins. Co.
2007 U.S. Dist. LEXIS 27684 (E.D.N.Y., April 13, 2007)

The District Court for the Eastern District of New York held that a liquidating agreement between an Owner and a Surety was valid and enforceable, even though it permitted the Owner to retain any recovery it obtained from the third-party, rather than having money pass-through to the surety.

The case arose out of a project to build and renovate facilities for Menorah Home and Hospital for the Aged and Infirm (“Owner”). The Owner entered into a contract with J.A. Jones Construction Group, LLC (“Jones”) for the Project. When Jones defaulted, Fireman’s Fund Insurance Company (“FFIC”), Jones’ surety, took over and completed the Project. The Owner subsequently sued FFIC alleging that FFIC had breached its performance bond obligations by failing to complete the Project in a timely manner and correct deficiencies in the work performed by Jones. Continue reading “NY District Court Enforces Liquidating Agreement Between Owner And Surety That Permitted Owner To Retain Recovery Obtained From Third Party To Satisfy Owner’s Claim For Damages Against Surety”