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Improper Termination Caused Lost Bonding Capacity Termination-default; Damages

Tuesday, August 03, 2004 02:32 pm

Improper Termination Caused Lost Bonding Capacity Termination-default; Damages

A federal court has ruled that a prime contractor's wrongful termination of a subcontractor for default, instead of terminating for convenience, exposed the contractor to liability for the consequences of the sub's lost bonding capacity.

The City of New York awarded a contract for construction of a storm overflow retention facility to the joint venture of E. E. Cruz & Co., Inc., Nab Construction Corp., and Frontier-Kemper Construction, Inc. The joint venture subcontracted the first phase of the project, construction of an excavation support system (ESS), to The Millgard Corp.

The design of the E [...]

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