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Contractor Shows Nonpayment For Alleged Incomplete Work May Be A Contract Breach

Friday, April 04, 2008 02:40 pm

Contractor Shows Nonpayment For Alleged Incomplete Work May Be A Contract Breach

Breach of Contract - Claim Scope - Incomplete Work Barclay White Skanska, Inc. v. Battelle Memorial Institute United States Court of Appeals for the Fourth Circuit No. 07-1084 (January 29, 2008)

A federal court of appeals overturned summary judgment granted to an owner when the contractor was able to show breach-of-contract fact questions involving nonpayment for incomplete work.

Battelle Memorial Institute (Battelle) contracted with Barclay White Skanska, Inc. (BWS) for construction management of a technology center. Under the agreement, Battelle would pay BWS a contractor's fee and the cost of work up to a "guaranteed maximum price"(GMP), which BWS could increase by requesting scope of work increases via change orders.

The dispute involves a difference in several numbers. The two parties did not even agree on the final contract price: BWS valued the contract at $13.4 million, while Battelle valued it at $200,000 less. Plus, they disagreed (by approximately $700,000) on the amount Battelle had already paid before it was to make its final installment.

Contract breach claim too narrow to stand, at first

When, in 2003, BWS submitted an invoice for final payment, it expected nearly $1.2 million (the contract price minus payments already made and a $170,230 retainage). A year later, Bat [...]

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