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Volume 5 - Number 12 | March 19, 2007
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EDITOR'S NOTES
This week’s issue provides lessons in simple ethics. In our first case, a contractor received double payment for work it performed for a municipality. Should the contractor return the money or can it keep the extra payment to pay off debts on unrelated projects? The court ordered the contractor to return the money.
In the second case, can a contractor demand a defaulted subcontractor to pay for the work of the replacement sub? The court said no, especially since the replacement work did not exceed the cost of the original subcontract. To require payment would be unjust enrichment for the contractor, who would have essentially received the work for free.
Finally, should a project owner expect a contractor to pay for acceleration costs to finish a job on time when the owner required the contractor to use a specific supplier that could not deliver the materials on time? In this case, the court said no. The contractor notified the owner of the delay, which then qualified it to file a claim for costs associated with the acceleration.
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CONTRACTOR MUST RETURN MISTAKEN DOUBLE PAYMENT
A double payment made to a contractor in error is not a windfall for the contractor. It must return the payment to the municipality, regardless of the contract’s “voluntary payment doctrine.”
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PRIME DENIED COST OF COMPLETION FROM DEFAULTED SUB
A terminated subcontractor is not responsible for paying the prime contractor for the cost of its defaulted work, says a Florida court, especially if the cost of the replacement contractor’s work does not exceed the cost of the original subcontract.
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NOTICE OF CLAIM NOT REQUIRED IF PROJECT OWNER BREACHED CONTRACT
When weather conditions delay delivery of jobsite materials and the owner requires the contractor to use a certain supplier, is the owner to blame for the project’s delay (and associated acceleration costs)? Or, is the contractor’s claim for acceleration barred because it did not file an official claims notice according to the terms of the contract?
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