Reviewed September 7, 2026.
In Farrell Building Co., Inc. v. Shinnecock Electric, Inc., 71 AD3d 821 (2d Dept 2010), an electrical subcontractor unilaterally terminated without notice and intentionally abandoned two residential projects. The general contractor retained replacement subcontractors at additional expense.
The appellate court affirmed summary judgment for the general contractor on liability. The decision did not fix a final damages amount. It also dismissed the appeal from denial of reargument because that order was not appealable.
Evaluate the cost of an improper departure
A subcontractor can face liability even if it believes it has performed all work covered by payments received so far. Subject to proof and the contract, reasonable completion costs exceeding the unpaid subcontract balance can be recoverable. For example, an assumed $300,000 reasonable completion cost against a $200,000 remaining balance produces a possible $100,000 difference, not an automatic award.
Before leaving a project, review whether a material breach or contractual right permits suspension or termination, and comply with applicable notice and cure procedures. Document nonpayment, progress, remaining scope and safety conditions. The general contractor should likewise preserve replacement bids, invoices, credits and mitigation records.
Kushnick Pallaci PLLC assists clients throughout New York with subcontract termination and completion-cost litigation. Contact 631-752-7100 or vtp@kushnicklaw.com.
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