For more than 40 years, attorney David Duree has provided his clients with sound, prudent legal advice and guidance. David lawyering encompasses a vibrant, diversified litigation practice, a personal injury practice and an engineering and construction law practice that draws on his expertise as an engineer himself.
Wm. R. Clark Corp. v. Safeco Ins. Co., 938 P. 2d 372 (Cal. 1997); Wm. R. Clark Corp. v. Safeco Ins. Co., 78 Cal. App. 4th 355, 92 Cal. Rptr. 2d 709 (Cal. 2000)
In California “pay if paid” clauses in subcontracts are void as against public policy. A bankrupt sub-contractor recovered about $900,000.00 from the general contractor’s surety which was entitled to a credit for the amounts it paid the claimant’s unpaid subcontractors, approximately $200,000.00. A subsequent appeal determined that the sub-contractor was entitled to pre-judgment interest on the full amount of the award in its favor (before the deduction-offset in favor of the surety).
United States f/u/b of Interstate Mechanical Contractors, Inc. v. International Fidelity Insurance Co., 200 F.3d 456 (6th Cir. 1-14-2000)
A subcontractor must file its Miller Act suit within one year after the last work performed under its original subcontract. 40 U.S.C. 270 et seq. Work performed to correct defects, or to make repairs following inspection, and the testing of corrective work are remedial in nature and do not toll the one year statute of limitations. The subcontractor’s claim was time barred.
Miller v. Big River Concrete, LLC et al., 14 S.W.3d 129 (Mo. App. 2000)
Home owners acting as the general contractor could recover economic loss damages (the costs of reconstruction) from an engineer and his employer for gratuitously but negligently testing the foundation concrete and for negligently misrepresenting the results of the test. The economic loss rule and the absence of privity of contract between the engineer (and his employer) and the home-owners-builders did not preclude recovery.
CH2M Hill, Inc v. Alexis Herman, Secretary of Labor, et al., 192 F.3d 711 (7th Cir. 1999)
A construction firm used improper electrical equipment during tunnel construction resulting in a methane gas explosion and the death of three employees. The engineering services contract between the owner and engineering firm had the usual clauses imposing no responsibility on the engineers for the safety practices of the contractors and permitting only the owner to stop work. The engineer was required to redesign work, when requested by the owner, which was underway at the time of the explosion. OSHA issued a citation to the engineering firm, finding that it was actually involved in construction activities at the time of the explosion. The Court of Appeals vacated the citation, finding that while the engineering services and other contracts do not per se exclude design and other professionals from liability for OSHA construction standards, in this case the engineering firm was not engaged in construction work and thus was not subject to OSHA construction standards.
17 Vista Fee Associates v. Teachers Ins. and Annuity Association of America et al., 259 A.D.2d 75, 693 N.Y.S.2d 554 (N.Y. sup., app. div. 1999)
The seller of a building may recover amounts paid the buyer for a subsequently discovered design error, through indemnification from the design engineer whose negligence caused the damage. The economic loss doctrine did not preclude recovery from the negligent engineer for his professional malpractice.
Harbor Court Associates v Leo A. Daly Co., 179 F. 3d 147 (4th Cir. 1999)
A clause in an A.I.A. form contract, overriding statutes of limitations and repose, providing that all statutes of limitation run from the dates of substantial and final completion, was enforced. An owner’s claim for negligent design for damages occurring 8 years after final completion, when a 15 foot area of brick veneer exploded off the face of the complex, was barred by the contract language. The “date of discovery” rule, that otherwise would have applied, was overridden by the contract.
Consolidated Electrical & Mechanical, Inc, et al., v. Biggs General Contracting, Inc., et al., 167 F.3d 432 (8th Cir. 1999)
A general contractor and its surety were liable to a subcontractor for its entire delay damages under the Miller Act, 40 U.S.C. 270 et seq., even though the Government (Owner) was largely responsible for the delay. However, the subcontractor could not recover on its claim for lost profits under the Miller Act, and failed to include such state law claim in its complaint. The Miller Act does not cover lost profits
Cates Construction, Inc v. Talbot Partners, et al., 21 Cal. 4th 28, 86 Cal Rptr.2d 855, 980 P.2d 407 (Cal. 1999)
A construction contract and performance bond, construed together, permitted the project developer (bond obligee) to recover from the surety for delay damages, resulting from the delays by the bonded contractor; the developer could not, however, recover compensatory or punitive damages from the surety, under tort theories based on the surety’s bad faith.
Business men’s Assurance Company of America v. Graham, representative for Skidmore, Owings, & Merrill, et al., 984 S.W.2d 501 (Mo. banc 1999)
A judgment against the designing architect for more than $5,800,000 (with interest) was affirmed by the Missouri Supreme Court, which found that the damages occurring when marble panels fell from the side of a building were not capable of ascertainment until then. As a result the 5 year statute of limitations for negligence actions began from the date the marble panels fell, not the date on which the design work was performed. An earlier opinion in the same case is reported at 891 S.W.2d 438;
Tolan and Son, Inc. v. KLLM Architects, Inc, et al., 308 Ill.App.3d 18, 241 Ill.Dec. 427, 719 N.E.2d 288 (Ill. App. 1999)
The owner of a townhouse complex brought suit against an architectural firm, soils engineer and structural engineer after cracks developed the foundations. A professional who is in the business of supplying information for the guidance of others may be held liable for purely economic losses (not resulting from personal injury or property damage) for negligent misrepresentations, as an exception to the economic loss rule. However, the architectural firm and soils engineer were retained to build a structure rather than provide information, and thus did not come within the exception to the economic loss rule. The case was remanded as to the structural engineer because additional evidence was required to determine if he was engaged for the purpose of supplying information.
United States v Bestfoods et al., 524 U.S. 51 (1998)
A parent corporation may be held liable under CERCLA, 42 U.S.C. 9601, et seq; 42 U.S.C. 9607(a)(2), for the cleanup of industrial waste at a plant owned or operated by its defunct subsidiary, if the parent corporation operated the plant or if the corporate veil of the subsidiary is pierced under state law principles. The parent operated the polluted plant if the joint officers, directors and employees of the parent and subsidiary were operating the plant for the parent, a necessarily fact intensive question. The parent cannot be held liable for the subsidiary’s ownership or operation of the polluted plant simple because it owned all the subsidiary’s stock. 113 F.3d 572 vacated and remanded.
AJM Packaging Corp. v. Crossland Construction Co., Inc., 962 S.W.2d 906 ( Mo. App. 1998)
The arbitration clause in standard general contract conditions form A.I.A 201, 1987, was unenforceable, even though it was incorporaated by refereence into the standard general contract, form A.I.A. 101, because the contractor seeking to compel arbitration did not put A.I.A. 201 into evidence, and because A.I.A 201 conflicted with another standard contract clause in the project manual providing that all claims and disputes would be decided in court by the courts of Missouri.
City of Independence, Missouri f/u/o Wilbur Briggs v. Kerr Construction Paving Co., Inc. and the Hartford Fire Ins. Co., 957 S.W. 2d 315 (Mo. App. 1997)
Subcontractors and material suppliers can recover penalties for late payment under the “Public Works Prompt Payment Statute”, R.S.Mo. § 34.057, but such penalties may not be imposed against the surety for the late-paying contractor.
Unnerstall Contracting v City of Salem, 962 S.W. 2d 1 (Mo. App. 1997). Construction Lawyer.
A contractor can recover from a public works owner for breach of warranty where the subsoil conditions varied from those represented in the contract documents, by establishing (1) a positive representation by the government (2) of a material fact (3) which is false or incorrect (4) lack of knowledge by the contractor of the correct facts (5) reliance by the contractor on the representation (6) resulting economic damages to the contractor.
Integon Indemnity Corp. v. United States, 12 Cl. Ct. 115 (Cl. Ct. 1987); Balboa Ins. Co. v United States, 775 F. 2d 1158 (Fed. Cir. 1985). See, however, <>Admiralty Const., Inc by National American Ins. Co. v. Dalton, 156 F. 3d 1217 (Fed. Cir. 1998) and <>National Surety Corp. v. United States, 118 F. 3d 1542 (Fed. Cir. 1997)
The government may be held liable to the contractor’s surety, for progress payments made to the contractor after notice from the surety that the contractor is in default, and the government had notice of problems with the contractor’s performance. The government thereby abused its reasonable discretion to distribute the contract funds to the contractor.
Smith v. United States, 34 Fed. Cl. 313 (1995), appeal dismissed 91 F. 3d 165 (Fed. Cir. 1996)
A contractor’s delay claims were denied where the government-caused delays were not critical to performance, because the contractor was not yet in a position to begin full-scale production at the time of the delays.
Roy A. Elam Masonry, Inc. v. Fru-Con Construction Corporation. 922 S.W.2d 783 (Mo. App. 1996)
A clause in a subcontract prohibiting the subcontractor from recovering damages for delay from the general contractor unless the owner was liable to the general contractor for such damages, precluded the subcontractor from recovering from the general contractor while the general contractor’s claim against the owner for similar damages was pending. This clause did not violate the statutory prohibition of such clauses in public works contracts, R.S.Mo. 34.058, because this was a subcontract between private parties for a private project. $805,000 judgment for the subcontractor reversed, without prejudice to renew its claim once the litigation between the general contractor and owner is concluded.
Chesapeake Paper Products Co. v. Stone & Webster Engineering Corp. 51 F.3d 1229, (4th Cir. 1995)
The Owner retained an engineering firm to provide engineering services for a $105,000,000 plant expansion. The engineering firm sent its standard engineering services contract to the owner, which was not signed. It required the firm to follow “good engineering practices”. The owner sent the firm a purchase order, which not rejected by the firm. The purchase order imposed a higher standard on the engineering firm, requiring the materials and other articles covered by it to be free from “defects in material and/or workmanship, and merchantable”. The parties then signed an amendment that modified the engineering firms unsigned standard contract “as referenced” in the owner’s purchase order. Since this contractual arrangement was ambiguous about the standard of care imposed on the engineering firm, the intent of the parties was submitted to the jury, which found for the owner. The resulting judgment was affirmed.
Tommy L. Griffin Plumbing & Heating Co. v Jordan, Jones & Goulding, Inc. 463 S.E.2d 85 (S.C. 1995)
A General Contractor could recover purely economic damages from the engineer which designed and administered the project under negligent design, negligent administration and breach of implied warranty theories notwithstanding the absence of a contract between them. The engineer owed a duty to the contractor to refrain from negligently designing or administering the project. The economic loss rule did not bar the claim.
B. Kelso II v. Kirk Brothers Mechanical Contractors, 16 F. 3d 1173 (Fed. Cir. 1994)
The project schedule called for the government to provide the equipment necessary for final testing, balancing, and start up fairly early in the project. The government did not meet that deadline. The court denied delay damages to the contractor, however, finding as a matter of fact that the government-furnished equipment was not actually required until the end of the project, denying the delay damage claim because the governments’ delay was not the “sole cause” of the delay.
Northridge Co. v. W.R. Grace & Co., 471 N.W. 2d 179 (Wisc. 1991)
In Wisconsin a commercial user (owner, lessee) of a construction product, may recover for diminution in value of the building, resulting from the defective product, in tort. The user may also recover the cost of repairing the damaged building. Privity of contract between the user-plaintiff and the product manufacturer is not required.
Jokich v. Union Oil Co. of California, 214 Ill. App. 3d 906, 158 Ill. Dec. 420, 574 N.E. 2d 214 (Ill. App. 1991)
A contractor may be held liable to the owner, in a third-party action (the original claim was filed by the contractor’s employee against the owner of a crane) for violation of the contractual clause requiring the contractor to provide liability insurance. This does not violate the Illinois Statute prohibiting indemnity agreements against personal injuries on construction projects
Centerre Trust v. Continental Insurance, 167 Ill. App. 3d 376, 118 Ill. Dec. 151, 521 N.E. 2d 219 (Ill. App. 1988)
An owner-lender waived the right to claims for liquidated damages, both contractually and at common law, by making progress payments with knowledge that the work was untimely and by making final payment to the contractor, barring such claims against either the contractor or its surety.
Fence Rail Dev. Corp. v. Nelson & Assoc., 174 Ill. App. 3d 94, 123 Ill. Dec. 799, 528 N.E. 2d 344 (Ill. App. 1988)
A builder’s claim that the architect negligently furnished the wrong house foundation plan by providing plans for a “brookside” home instead of the contractually required “Georgian” style home was a claim for economic damages which could not be recovered in a tort action where the builder had not claimed any of the exceptions to the economic loss doctrine, such as fraud, intentional misrepresentation or negligent misrepresentation by a professional.
Western Waterproofing Co. v. Springfield Housing Authority, 669 F. Supp. 901 (C.D. Ill. 1987)
Subcontractor claims against a public owner for failure to require public works bonds from the prime contractor, under a negligence theory, denied. Emulsicoate, Inc. v. City of Hoopeston, 99 Ill. App. 3d 835, 55 Ill. Dec. 176, 425 N.E. 2d 1349 (Ill. App. 1981); another case, however, ruled that sub-contractors are third party beneficiaries of the public-works-bond act;
Pathman Constr. Co. v. United States, 817 F. 2d 1573 (Fed. Cir. 1987)
Under the Contracts Dispute Act, 41 U.S.C. § 605 (c) (5), the failure of the contracting officer to issue a timely decision on a contract claim is deemed a decision by the contracting officer denying the claim, authorizing commencement of the appeal or suit.
Active Fire Sprinkler Corp. v. U,S. Postal Service, 811 F. 2d 747 (2nd Cir. 1987)
A subcontractor which failed to file its Miller Act suit within the 1 year limit was entitled to recover the amount due it from the general contractor, from the postal service, out of the contract balance which otherwise would have been due from the postal service to the general contractor. The contractor’s surety had an assignment of the general contractor’s right to the construction balance. The Supreme Court had previously recognized subcontractor claims to the contract balance, but subcontractor claims had previously been unenforceable against the federal government because of sovereign immunity. Here the postal service waived its right to sovereign immunity. The court relied on Kennedy Electric v. U.S. Postal Service, 508 F. 2d 954 (10th Cir. 1974), where subcontractor claims against the postal service were allowed because it failed to require a public-works-bond from the general contractor.
Forte Bros., Inc. v. National Amusements, Inc., 525 A.2d 1301 (R.I. 1987); Milton J. Womack, Inc. v. House of Representatives of the State of Louisiana, 509 So. 2d 62 (La. App. 1987), writ denied, 513 So. 2d 1208 (la. 1987)
An architect may be found liable to a contractor for economic damages notwithstanding the absence of privity of contract between the architect and the contractor. The architect’s duty of due care extends to the contractors who reasonably rely on proper performance of the architect’s duties established by the architect-owner contract.
L.K. Comstock & Co. v. Morise/UMB Joint Venture, 153 Ill. App. 3d 475, 106 Ill. Dec. 462, 505 N.E. 2d 1253 (Ill. App. 1987)
The construction manager was a third party beneficiary of an owner-contractor contract, but the contractor was not a third party beneficiary of the construction manager-owner contract.
Anderson Electric v. Ledbetter Erection Corp., 115 Ill. 2d 146, 104 Ill. Dec. 689, 503 N.E. 2d 246 (Ill. 1986)
Subontractor claims for costs incurred in redoing work required by a manufacturer, which pursuant to an agreement with the general contractor was required to inspect portions of the project as its equipment was installed, were purely economic damages, for which the subcontractor could not recover in tort, having failed to plead or prove negligent or intentional misrepresentation, two of the exceptions to the economic loss doctrine.
Council of Co-owners Atlantis Condominium, Inc. v. Whiting Turner Contracting Co. et el., 517 A. 2d 336 (Md. App. 1986)
Builders and architects were held liable to condo unit owners, despite the absence of privity of contract, for economic damages (the cost of precautionary repairs) resulting from defective construction that threatened the owners with physical injury and violation of the building codes. The economic loss doctrine did not preclude recovery from the architect.
Trapkus v. Edstrom’s, Inc., 140 Ill. App. 3d 720, 95 Ill. Dec. 119, 489 N.E. 2d 340 (Ill. App. 1986). Construction Attorney.
Where agreements are interrelated and indivisible, where the parts of the different agreements appear to be interdependent and common to one another and to the consideration for the contracts, the agreements should be construed as a single contract. The right the rescind one is the right to rescind all.
Santucci Const. Co. v. Baxter & Woodman, Inc., 151 Ill. App. 3d 547, 104 Ill. Dec. 474, 502 N.E. 2d 1134 (Ill. App. 1986)
Economic damages are recoverable from an engineer or architect for intentional interference with contract rights, although a professional engineer has a conditional privilege to protect the interests of its principal (owner) which would justify an interference that would be improper otherwise. Such claims are among the exceptions to the economic loss doctrine established in Moorman Manufacturing Co. v. National Tank Co., 91 Ill. 2d 69, 61 Ill. Dec. 746, 435 N.E. 2d 443 (Ill. 1982). The economic loss doctrine precludes the recovery of “contract type” damages under tort theories where there is no cataclysmic occurrence, property damage or physical injury.
Cincinnati Riverfront Coliseum, Inc. v McNulty Co., et al., 504 N.E.2d 415 (Ohio 1986)
A contractor’s deviation from the plans will relieve the design engineer from liability for a negligent design of a walkway only if the deviations served independently to break the causal connection between the negligent design and the damages, by completely removing the effects of any negligence by the design professionals. The evidence established questions of fact for the jury on these issues. A new trial was ordered because of error in the jury instructions.
Steinberg v. Fleischer, 706 S.W. 2d 901 (Mo. App. 1986)
A contractor is entitled to submit both quantum meruit and breach of contract theories to the jury, in the alternative, where both theories were pleaded. Contract evidence may be introduced as prima facie evidence of the reasonable value of the work under the quantum meruit theory.
Honey v. Barnes Hospital, et el., 708 S.W. 2d 686 (Mo. banc 1986)
The parents of a psychiatric patient who have committed suicide by jumping from a hospital window could recover wrongful death damages, including damages for aggravating circumstances (a punitive type damage) from the hospital, general contractor and window manufacturer. The jury ruled in favor of the architect.
New Pueblo Constructors, Inc. v. State, 696 P. 2d 185 (Ariz. 1985)
Where the owner (state) was aware of changed conditions and a claim for compensation, and where no prejudice was shown by the lack of formal notice, the claim for compensation was not barred. A strict application of the notice provisions was not required.
Moore Construction Co. v. Clarksville Dept. of Elec., 707 S.W. 2d 1 (Tenn. App. 1985)
One prime contractor was held to be a third-party beneficiary to the contract between the owner and another prime contractor.
State of Texas v. Buckner Const. Co., 704 S.W. 2d (Tex. App. 1985)
Overzealous inspection by state inspectors who were inexperienced and required a higher quality of workmanship than required by the specifications constituted maladministration permitting the contractor to recover for breach of contract and delay damages based upon the State’s refusal to accept to contractor’s work (painting and sandblasting).
Paul N. Howard Co. v. Puerto Rico Aqueduct Sewer Authority, 744 F. 2d 880 (1st Cir. 1984)
Instability of a highway embankment was held to be an unusual soil condition entitling the contractor to an equitable adjustment under the Differing Site Condition Clause.
William F. Kingensmith v. United States, 731 F. 2d 805 (Fed. Cir. 1984)
The contractor claiming delay damages has the burden of persuasion and burden of proof to establish a reasonable basis for apportioning the effects of concurrent delays and causes for delay between the owner/government and the contractor (as well as third parties).
AAA Excavating, Inc. v. Francis Construction, Inc., 678 S.W. 2d 889 (Mo. App. 1984)
A general contractor may recover from an engineer for negligent representations in a soil test report.
Preload Technology, Inc. v. A.B. & J. Constr. Co., Inc., 696 F. 2d 1080 (5th Cir. 1983), rehearing denied, 703 F. 2d 557 (5th Cir. 1983)
Bid shopping and bid chiseling by the general contractor will terminate the right of the general contractor to rely on promissory estoppel to hold its suppliers and subcontractors to their pre-bid quotes.
Silliman Co. v. S. Ippolito & Sons, Inc., 467 A.2d 1249 (Conn. 1983)
Failure to make progress payments allows a subcontractor to void its contract.
Guthrie v. Reliance Construction Co., Inc., 612 S.W. 2d 366 (Mo. App. 1980)
A general contractor stands in the position of an owner/possessor of real property, with respect to the project it is constructing, while the project is under construction. It owes a duty of due care to the employees of independent contractors and to third parties on the premises.
Lyman Construction Co. v. Village of Gurnee, 131 Ill. App. 3d 87, 86 Ill. Dec. 276, 475 N.E. 2d 273 (Ill. App. 1985); Corbetta Construction Co. v. Lake County Public Building Comm’n., 64 Ill. App. 3d 313, 21 Ill. Dec. 431, 381 N.E. 2d 758 (Ill. App. 1978)
The alleged negligent design by an architect or engineer cannot be interposed as a defense by a contractor who fails to comply with the plans and specifications provided to him. The contractor had a duty to carry out the construction in accordance with the plans and specification agreed upon and can depart from them only at its peril.
Hunt v. Blasius, 74 Ill. 2d 203, 23 Ill. Dec. 574, 384 N.E. 2d 368 (Ill. 1978)
An independent contractor owes no duty to third persons to judge the plans, specifications or instructions which he has contracted to follow. He is not liable for following these plans, specifications or instructions unless they are so obviously dangerous that a competent contractor would not follow them.
Kieser Aluminum v. United States Consumer Product Safety Commission, 574 F. 2d 178 (3rd Cir. 1978)
Aluminum Branch Circuit Wiring is under the jurisdiction of the Consumer Product Safety Commission, which has published reports that such wiring is a potential fire hazard.
Capua v. W.E. O’Neil Construction Co., 67 Ill. 2d 255, 10 Ill. Dec. 216, 367 N.E. 2d 669 (Ill. 1977)
The Illinois Statute which prohibits indemnity on construction projects, for personal injury claims, excepts public works bonds and liability insurance policies. Accordingly, a building owner, sued for personal injury, could maintain a third party action against the contractor’s surety for indemnity, under the terms of the performance bond, but could not sue the bond principal-contractor for indemnity. Normally contractors, bond-principals, also indemnify their surety against any losses. The court did not address the surety’s argument that the public works bonds were not intended to indemnify the owner against personal injury claims, although it rejected the argument by implication.
Howard v. Nicholson, 556 S.W. 2d 477 (Mo. App. 1977)
An owner was constructing a building to lease to a third party-tenant which filed for bankruptcy. The building could not be used for any other purpose. The owner was relieved from further contractual obligations to the contractor under the doctrine of commercial frustration. The doctrine of impossibility of performance applies only if the performance was originally possible and rendered impossible by (1) an act of god, (2) the law, or (3) the other party.
Grow Construction Co., Inc. v. State of New York, 391 N.Y.S. 2d 726 (1977)
An exculpatory clause relieving the State of New York from liability and from any obligation to personally inspect the construction site, did not relieve the state of liability for unforeseen sub-surface soil conditions.
Cork Plumbing Co. v. Martin Bloom Associates, 573 S.W. 2d 947 (Mo. App. 1978); Brady Brick & Supply Co. v. Lotito, 43 Ill. App. 3d 69, 356 N.E. 2d 1126 (Ill. App. 1976)
Failure to make progress payment is a substantial breach of a contract giving the contractor the right to consider the contract at an end, cease work and recover the value of the work performed to date.
Merritt-Chapman & Scott Corp. v. United States, 208 Ct. Cl. 639, 528 F.2d 1392 (U.S. Court of Claims 1976)
A contractor was entitled to recover for delay damages under an early version of the suspension of work clause, even though there were multiple causes of the delay. Later, more specific, versions of the suspension of work clause might have precluded recovery.
Illinois State Toll Highway Comm’n ex rel Patten Tractor & Equipment Co. v. Boyle & Co., 38 Ill. App. 2d 38, 186 N.E. 2d 390 (Ill. App. 1962); Board of Local Improvements v. St. Paul Fire & Marine Ins. Co., 39 Ill. App. 3d 255, 350 N.E. 2d 36 (Ill. App. 1976)
Under a conditional sales contract for construction equipment (lease with option to purchase) the seller/lessor of the equipment could recover for depreciation of the machinery and for the use and rental value of the machinery furnished underIllinois public works bonds for a construction project, but could not recover for repairs on the machinery where the public works bonds and statute did not provide for the cost of repairs.
Goodyear v. Jr. College Dist. of St. Louis, 540 S.W. 2d 621 (Mo. App. 1976)
A contractor may not recover from a school district, or other public body, on a quantum meruit or any theory of implied contract, because Missouri Statutes provide that all contracts with a school district, (and other public bodies), must be in writing.
Gerstner Electric v. American Insurance Co., 520 F. 2d 790 (8th Cir. 1975)
A surety did not tortiously cause a breach of contract between the bonded principal, contractor and the state of Missouri by notifying the state to withhold payments from the contractor which had refused to pay one of its sub-contractors, which had then demanded payment from the surety under the payment bond.
Shell -Con v. Nebraska Prestressed Concrete Co., 526 S.W. 2d 903 (Mo. App. 1975)
A contractor can recover in quantum meruit for the value of work performed to date when the owner breaches the contract preventing the contractor from completing it. Curators of University of Missouri ex rel
First State Bank v. Reorganized School District, 495 S.W. 2d 471 (Mo. App. 1973)
The prospective inability to perform which arises upon the insolvency of one party to a contract does not, at that juncture, excuse the other party from performance. The surety which completes a project after the bonded contractor’s failure to perform has a higher equitable interest in the contract fund, dating back to the date of bond execution, than a bank holding an assignment of proceeds from the bonded contractor.
United States v. Spearin, 248 U.S.132 (1918)
roject owners impliedly warrant to contractors that the plans and specifications are accurate and complete, and if followed faithfully are sufficient to produce a functioning project. The owner is required to reimburse the contractors for any increased costs caused by defects in the design which constitute a breach of this implied warranty.
