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Govt. Still Owes Engineer After Abandoning Unfunded Project

Thursday, December 01, 2011 06:04 am


Payment -- Nonperformance

The Board of Works of the City of Lake Station, Indiana v. I.A.E., Inc., 2011 Ind. App. Lexis 1727 (Sept. 15, 2011)

An engineer was entitled to damages where the government dragged its heels in seeking funding and then eventually gave up on the unfunded project

I.A.E. Consulting Engineers, Inc. (I.A.E.) provided engineering plans and specifications on a project owned by the Board of Works of the City of Lake Station, Indiana and the City of Lake Station (collectively, Lake Station) to improve roads and a bridge. I.A.E. substantially completed its work, but Lake Station was unable to pay I.A.E. the full $450,000 contract price because it had not yet received federal funding. Four years later, Lake Station gave up on the project. I.A.E. filed suit, seeking payment for its work, but Lake Station alleged that receipt of funding was a condition precedent to payment that had not been fulfilled.

A trial court disagreed and awarded I.A.E. $900,000 in payment plus interest, based on Lake Station's breach of the contract. Lake Station appealed, claiming that it was I.A.E. that breached the contract.

Lake Station contended that I.A.E.'s decision to stop work on the pro [...]

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