In Beys Gen Const. Corp. v. Hill Intl Inc., the Appellate Division, Second Department, affirmed the decision of a trial court which awarded summary judgment to a subcontractor against a prime contractor for non-payment. In this instance, the subcontractor contended that it had fully completed the work, completed the work properly, and had not been paid. As part of its proof the subcontractor submitted a certificate of substantial completion, a final inspection report and an affidavit stating that the contract work had been performed and that payment in full had not yet been received.
The general contractor attempted to defeat the subcontractor's claim by submitting a New York City Engineering Office Audit report. The general contractor also attempted to argue that the subcontractor did not submit sufficient documentation in support of its payment requisitions. However, the documentation requirements that the general contractor relied upon were requirements in the prime contract between the general contractor and the owner - they were not requirements in the subcontract. The general contractor was arguing that there was a clause in the subcontract that incorporated the terms and conditions of the prime contract by reference. But the Appellate Division found that the subcontractor was not bound to the documentation requirements of the prime contract because those provisions did not relate to the "scope, quality, character and manner of the work to be performed."
General contractors can take a good lesson from this case - if you want terms from your prime contract to be included within your subcontract, put the provision in the subcontract. Don't just rely on an incorporation reference.
Vincent T. Pallaci is a partner in the New York law firm of Kushnick Pallaci, PLLC. His practice focuses primarily on the area of construction law. He can be reached at (631) 752-7100 or email@example.com. You can also visit our firm site at www.nyconstructionlaw.com