We all know what happens when we “ASS-U-ME” something. So, we should all carefully avoid assuming things unnecessarily.
The prime contractor described below recovered its costs by properly not assuming a duty. This required a distinction among duties that:
- must be done;
- should be done; or
- need not be done.
On a project for the Florida Department of Transportation, the Prime Contractor terminated its landscaping subcontractor for default after the obligatory 72-hour cure period passed. The Prime then promptly submitted a performance bond claim to the terminated sub’s surety. The Prime was obligated to and did wait the 15-day “grace period” for the surety to investigate and respond. However, when the surety failed to substantively respond, the Prime properly mitigated its damages by engaging a replacement subcontractor.
Upon completion of the replacement subcontractor’s work, the Prime submitted its recoverable costs to the defaulted sub’s surety. The surety denied payment by arguing the Prime failed to assist with the surety’s investigation of the default. The Court awarded summary judgment to the Prime finding it had no duty to assist with the surety’s investigation absent an express requirement, which was not included in the bond or subcontract.
The Court agreed that the Prime need not help the surety with the heavy lifting of investigating the sub’s termination for default.
Roads & Bridges | All According to Plan
ALL ACCORDING TO PLAN | Exact Measurements Go a Long Way
In December 2013, a contractor agreed to replace four bridges for the […]
Roads & Bridges | Connecting the Dots
CONNECTING THE DOTS | Showing Causation in Contracting Cases is Critical
In this asphalt case, the prime contractor agreed to perform a $13 […]
Roads & Bridges | Liquidated Damages
LIQUIDATED DAMAGES | Penalties and What is Unenforceable
Liquidated damages typically flow from delays, but they are not always solidly enforced.
In June 2017, […]
Roads& Bridges | Warranty Provisions
WARRANTY PROVISIONS | Contracts must be interpreted thoroughly to avoid absurd results
You are responsible for things within your control. Be careful if […]
Roads& Bridges | The Agreed Price
THE AGREED PRICE | This case stands as a warning about pay-if-paid clause
History cannot be rewritten and a bad, but legal, […]
Roads& Bridges | Confusing Waters
CONFUSING WATERS | A Supreme Court ruling leaves room for ambiguity
What happens when there may be a “significant nexus” between “adjacent” and/or […]
Roads & Bridges | Authority Defined
AUTHORITY DEFINED | The Law of Agency is Important to Understand
For any project, this Russian proverb is helpful: Doveryay, no proveryay – […]
Jurisdiction is Power
Not bad power, but the ability of a decision-maker (e.g., court) to decide which side is right (or which is more correct). […]
Roads & Bridges | Defining Labor
DEFINING LABOR | How the Miller Act continues to shape the industry
In the late 1700s, risks of nonpayment caused a shortage of […]
