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Contract's Notice Provisions Apply Even After Termination

Wednesday, August 01, 2012 05:42 am


Notice Provisions

Realm, Inc. v. The City of Olympia, 2012 Wash. App. Lexis 553 (May 8, 2012)

A contractor jumped straight to litigation to recover costs associated with its contract termination--instead of following contract instructions for protests.

The City of Olympia, Washington (the City) hired Realm, Inc. (Realm) to build a fish passage tunnel and then later terminated the contract for convenience. Realm submitted a claim for work performed in the amount of $1.1 million. After conducting an audit to determine the amount owed, the City paid Realm half that amount. Realm sued for the difference, but it had waived its right to sue by failing to comply with the contract's notice provisions.

Realm argued that it wasn't required to comply with the contract's notice provisions because the dispute in question arose after the city terminated the contract. The court disagreed.

The parties' contract incorporated the Washington State Department of Transportation Standard Specifications for Road, Bridge, and Municipal Construction, which include a notice provisions section (Section 1-0 [...]

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