Niel Franzese | Construction Law Zone
While you may not have heard the term “slaughter clauses” to describe the provisions of a construction contract before, the metaphor makes sense when one considers the provisions to which the Connecticut Superior Court recently applied the phrase. In the recent case of Electrical Contractors, Inc. v. Lawrence Brunoili, Inc., et al., Docket No: X-07 HHD CV-20-6129731, the Superior Court considered many subcontractors’ least favorite contract provisions – those that impose limits on a subcontractor’s right to recover money, like strict notice provisions, payment limitations, and damages restrictions.
The Court (Hon. Thomas Moukawsher) was recently presented with the question of whether such clauses may be included in state construction subcontracts subject to Connecticut General Statutes § 4b-96, a provision of the public works contracting scheme which specifies the statutory form of subcontracts required on covered projects. Electrical Contractors, Inc., a subcontractor to Lawrence Brunoli, Inc. on the Kaiser Hall renovations project at Central Connecticut State University, sued Brunoli and its surety, alleging that Electrical Contractors was entitled to recover additional costs incurred as a result of alleged errors, omissions, and deficiencies by Brunoli in managing the project.
During the course of the litigation, Electrical Contractors moved for summary judgment on, among other things, certain of Brunoli’s and the surety’s special defenses which collectively relied on subcontract provisions that Electrical Contractors argued were illegal and unenforceable under C.G.S. § 4b-96 in that they contradicted the terms of the statutory form of subcontract. The Court agreed with Electrical Contractors with respect to these clauses and granted it partial summary judgment on the surety’s relevant special defenses.
In its Memorandum of Decision, the Court observed that § 4b-96 mandates a specific form of subcontract and “specifies every part of the contract from the title to the signature lines.” Unlike other statutory provisions which might require agreements or contract provisions to be “substantially” in the form specified by statute, § 4b-96 contains no such room for modification. Because the statutory form of subcontract required that the contractor assume toward the subcontractor all of the obligations and responsibilities that the state assumed toward the contractor pursuant to the relevant contract documents, the Court held that a pay-if-paid provision could not be included to create a situation where “the state could owe something to the contractor that the contractor would not owe to the subcontractor.”
Faced with a less clear analysis on other specific “slaughter clauses” included in the subcontract, the Court went on to hold more broadly that additional clauses not specified in the statute may be added only to the state-controlled portion of the contract, i.e., the prime contract’s general conditions. Holding that “‘shall’ means shall,” the Court ruled that if Brunoli wanted to vary the statutory subcontract’s terms, it needed to request that the state include those varied terms in the state-controlled general conditions of the prime contract, which would then be incorporated into the subcontract as per the statutory form language. With respect to some of the provisions under review, the state did just that, and the Court did not take issue with those particular clauses. Instead, the Court confined its decision to granting summary judgment on “the special defenses invoking those impermissible clauses” which were contained only in Brunoli’s modified form of the statutory subcontract.
Although the Court’s decision in this case is not an appellate level decision, it could have a big impact on the day-to-day contracting practices of subcontractors and general contractors on public works projects in the state of Connecticut. As the Court observed, its decision was somewhat contrary to the “contemporary practices” of construction contract drafting, but it did not let those perceived practices stand in the way of a strict application of the statute’s plain language. As a result, many public works contractors seeking work in Connecticut may need to reconsider the use of their form subcontracts, complete with the typical “slaughter clauses,” on projects to which § 4b-96 is applicable, and an increase in litigation by affected subcontractors currently subject to such provisions may follow the Court’s decision.