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Sub Terminated For Failure To Complete On Time -- Or In 'reasonable Time'

Wednesday, December 30, 2009 03:52 am


Contract Interpretation -- Contract Termination

Int'l Production Specialists, Inc. v. Schwing America, Inc.

United States Court of Appeals for the Seventh Circuit

2009 U.S. App. Lexis 19842 (September 2, 2009)

If a contract doesn't specifically include performance deadlines, work must be completed within a reasonable amount of time. But you don't have a "reasonable time" contract just because you disagree on the schedule.

Subcontractor Schwing American, Inc. (Schwing) hired manufacturer International Production Specialists, Inc. (IPS) to fabricate and install five storage silos at a wastewater treatment plant owned by Illinois' North Shore Sanitary District. While the original project timeline was eight months, the project was incomplete after more than three years. Schwing terminated IPS's contract citing IPS's failure to complete timely and satisfactory work. IPS sued for contract breach and Schwing countersued.

A district court found in Schwing's favor, and that verdict stood on appeal. [...]

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