{"id":677,"date":"2024-09-05T15:10:11","date_gmt":"2024-09-05T19:10:11","guid":{"rendered":"https:\/\/blogs.duanemorris.com\/constructionlaw\/?p=677"},"modified":"2024-09-05T23:32:55","modified_gmt":"2024-09-06T03:32:55","slug":"court-emphasizes-strict-compliance-in-construction-contracts","status":"publish","type":"post","link":"https:\/\/blogs.duanemorris.com\/constructionlaw\/2024\/09\/05\/court-emphasizes-strict-compliance-in-construction-contracts\/","title":{"rendered":"Court Emphasizes Strict Compliance in Construction Contracts"},"content":{"rendered":"

In a recent ruling, a New York appellate court sided with a contractor in a dispute over a 33-story building project.[1]<\/a> The contractor initially hired a subcontractor to supply equipment for the project, but the subcontract was later assigned to another entity. Shortly thereafter, the contractor alleged breaches of the subcontract, terminated the agreement, and took possession of the equipment. The contractor then filed a lawsuit seeking compensation for delays and additional costs resulting from the defendants’ defective work. In response, the defendants counterclaimed for breach of contract and sought foreclosure of mechanic\u2019s liens. They also filed a third-party claim against the property owner and its surety, seeking to foreclose on the liens.<\/p>\n

The court dismissed the defendants\u2019 counterclaims and third-party claims, highlighting the defendants’ reliance on unsigned and unnotarized requisitions and change orders, which failed to meet the contractual requirements. The court citing precedent underscored that payment requisitions must be both signed and notarized, and that change orders must be formally documented and mutually approved in strict compliance with the terms of the contract.[2]<\/a><\/p>\n

Additionally, the court found that the contractor had provided sufficient evidence to support its claims for delay damages. The contractor presented documentation detailing additional work performed by other vendors, as well as payments made to replacement subcontractors, due to the delays attributed to the defendants. The court found that such evidence raised genuine issues of material fact regarding the impact of the defendants\u2019 actions on the project\u2019s timeline and costs, prompting the court to deny the defendants’ motion for summary judgment on this issue.<\/p>\n

The court also rejected the defendants\u2019 claims for unpaid equipment rental, as they were unable to demonstrate that the proposed monthly rental rates had been agreed upon. The subcontract specified only a 12-month rental period, and the defendants could not provide evidence of any additional rental terms beyond that period.<\/p>\n

This decision highlights the\u00a0 importance of adhering to contractual documentation and approval processes in construction projects. It serves as a reminder to contractors and subcontractors alike to ensure that all requisitions and change orders are properly signed, notarized, and approved to avoid disputes and potential legal challenges. Furthermore, the ruling underscores the necessity of maintaining thorough records and evidence to substantiate claims for damages and delays. The court\u2019s decision reinforces the judiciary\u2019s commitment to enforcing strict compliance with agreed upon contract terms.<\/p>\n

Jose A. Aquino<\/a>\u00a0(@JoseAquinoEsq<\/a> on X) is a special counsel in the New York office of Duane Morris LLP, where he is a member of the Construction Group<\/a> and of the Cuba Business Group<\/a>.\u00a0 Mr. Aquino focuses his practice on construction law, lien law and government procurement law. This blog is prepared and published for informational purposes only and should not be construed as legal advice. The views expressed in this blog are those of the author and do not necessarily reflect the views of the author\u2019s law firm or its individual attorneys.<\/i><\/p>\n

[1]<\/a> Hudson Meridian Construction Group LLC v. Bayport Construction Corp.<\/em>, 228 A.D.3d 531, 215 N.Y.S.3d 78 (1st Dept. 2024)<\/p>\n

[2]<\/a> F. Garofalo Elec. Co. v. New York Univ.,<\/em> 270 A.D.2d 76, 80, 705 N.Y.S.2d 327 (1st Dept. 2000), lv dismissed<\/em> 95 N.Y.2d 825, 712 N.Y.S.2d 450, 734 N.E.2d 762 (2000); Martin Iron & Constr. Corp. v. Howell Co.,<\/em> 242 A.D.2d 608, 609, 664 N.Y.S.2d 746 (2d Dept. 1997).<\/p>\n","protected":false},"excerpt":{"rendered":"

In a recent ruling, a New York appellate court sided with a contractor in a dispute over a 33-story building project.[1] The contractor initially hired a subcontractor to supply equipment for the project, but the subcontract was later assigned to another entity. Shortly thereafter, the contractor alleged breaches of the subcontract, terminated the agreement, and … <\/p>\n

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