Contract Gives General Contractor Right to Delay Start of Sub’s Work, N.Y. Court Holds

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August 21, 2007

This article originally appeared on constructionweblinks.com

The general contractor and subcontractor entered into a subcontract that required the subcontractor to fabricate and install approximately 500 precast concrete wall panels on the exterior of a building being constructed by the general contractor.

The planned start date for installation of the wall panels was May 1997, but installation did not begin until September 1997. The subcontractor sued the general contractor to recover costs associated with the delay in wall panel installation, including transportation and storage charges.

The trial court held in favor of the general contractor, and the Appellate Division affirmed. Modern Mosaic, Ltd. v. Sweet Associates, Inc., 23 A.D.3d 880, 806 N.Y.S.2d 246 (3d Dept. 2005).

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The appeals court noted that the subcontract explicitly required the subcontractor to perform the work “in accordance with the project schedule developed by [the general contractor].” The appeals court found that the general contractor had the right to alter the schedule for the subcontractor’s performance of its work and that there were no limits, under the subcontract, to the general contractor’s exercise of its authority.

The appeals court, addressing the subcontractor’s claim for storage costs, noted that there was evidence the subcontractor was aware of the postponed date for the start of wall panel installation before any actual wall panel fabrication by the subcontractor.

The subcontractor also sued the general contractor for failing to provide the subcontractor with exclusive use of a tower crane for its work. The subcontractor agreed to provide the general contractor with a credit of $80,000 in return for permission to use the general contractor’s tower crane at the project. However, the appeals court found that the written agreement did not require the general contractor to provide the subcontractor with exclusive use of the crane. The court found the written agreement to be clear and unambiguous in this regard and, therefore, refused to consider any additional evidence that might have tended to show that the parties understood the subcontractor would be granted exclusive use of the tower crane.

For more information about the issues covered in this report, please contact John Fedun in our New York office at 212-895-2125 or at [email protected] or contact your Thelen attorney. For more information about Thelen’s Construction and Government Contracts Department, click here.

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