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State Pulls Plug On Electrical Contractor, Fails To Prove Faulty Workmanship Cause

Monday, August 04, 2008 03:24 pm


An owner made the mistake of terminating a contract rather than revising its flawed plans.

The State of Rhode Island initially hired SJV Electric Inc. (SJV) to renovate wiring previously installed in the docks at Galilee in Narragansett, Rhode Island. The State expected the work to take four months and to proceed expeditiously so as to limit the impact on commercial use of the docks. The contract called for installation of 200 ampere feeder cables and the use of bronzed sheath Okonite cable.

Almost immediately the project hit roadblocks. Delays in procuring necessary supplies, concerns over National Electric Code (NEC) fill requirements, and payment and workmanship technique disputes brought work to a standstill. Ultimately, the State issued a contract termination letter on May 25, 2000 accusing SJV of non-performance. It then hired K-Electric as a replacement contractor.

The State brought action against SJV for negligence and breaches of contract and performance bond. SJVentered counterclaims for contract breach and negligence. While the parties didn't dispute the main facts leading up to the contract termination, they did dispute the legitimacy of that termination in court. According to the parties' contract language (see AIA Document A201-1997), an owner may terminate the contract for cause if the contractor: (1) refuses/fails to supply workers/materials, (2) fa [...]

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