{"id":900984,"date":"2023-03-22T11:18:29","date_gmt":"2023-03-22T17:18:29","guid":{"rendered":"https:\/\/www.myconstructionexpert.com\/blog\/?p=900984"},"modified":"2023-03-22T11:18:33","modified_gmt":"2023-03-22T17:18:33","slug":"performance-bond-wrongful-termination","status":"publish","type":"post","link":"https:\/\/www.myconstructionexpert.com\/blog\/performance-bond-wrongful-termination\/","title":{"rendered":"Construction Litigation Roundup: \u201cI Never Had a Chance\u201d"},"content":{"rendered":"\n<p>Daniel Lund III | <a href=\"https:\/\/www.lexology.com\/library\/detail.aspx?g=94256ea5-9557-459f-9cb5-05e822a3de59&amp;utm_source=Lexology+Daily+Newsfeed&amp;utm_medium=HTML+email+-+Body+-+General+section&amp;utm_campaign=Lexology+subscriber+daily+feed&amp;utm_content=Lexology+Daily+Newsfeed+2023-03-15&amp;utm_term=\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Phelps Dunbar<\/a><\/p>\n\n\n\n<p>\u201cI never had a chance.\u201d&nbsp;<\/p>\n\n\n\n<p>Such was the plea of a general contractor to a Maryland federal court after having been terminated for <a href=\"https:\/\/www.myconstructionexpert.com\/blog\/performance-bond-call-me\/\" target=\"_blank\" rel=\"noreferrer noopener\">failure to perform<\/a>.<\/p>\n\n\n\n<p>\u201cThe Agreement provides no express right to cure,\u201d found the court, weighing in on the contractor\u2019s wrongful termination claim. Indeed, the contract was also very clear on termination, allowing for termination for cause on numerous bases, including a common catchall: if the contractor \u201cpersistently fails to perform the provisions of this Agreement.\u201d&nbsp;<\/p>\n\n\n\n<p>In advance of the actual date of termination, the owner wrote to the contractor, in accordance with the contract: \u201cNotice is also given that seven days from the date of this correspondence, [owner] will exercise its [termination] rights under Section 13.2.2.2 of the Contract.&#8221; The communication from the owner contained no discussion of allowing the contractor an opportunity to cure its alleged default.&nbsp;<\/p>\n\n\n\n<p>As a follow-up to the above, the court launched into a broad discussion that \u201cvarious treatises have recognized an implied right to cure in construction contracts.\u201d Several of those authoritative sources were quoted by the court:&nbsp;<\/p>\n\n\n\n<ul class=\"wp-block-list\"><li>&#8220;Cure is a fundamental common-law right implied in every contract as a matter of law.&#8221;&nbsp;<\/li><li>&#8220;The right of a breaching party to be given an opportunity to cure its own material breach is an ancient equitable principle\u2026.&#8221;&nbsp;<\/li><li>&#8220;The owner, however, under the terms of most construction contracts must give the contractor notice of the incomplete or defective work and opportunity to cure before it will be entitled to complete or correct the work itself.&#8221;&nbsp;<\/li><li>&nbsp;&#8220;The right to cure is a fundamental contractor right.&#8221;&nbsp;<\/li><\/ul>\n\n\n\n<p>Based on the foregoing \u2013 on its own initiative \u2013 the court essentially rewrote for purposes of the case the seven-day notice provision quoted above (although nonetheless still&nbsp;referred to the obligation as \u201cimplied\u201d). Per the court: \u201cIf [contractor] were not permitted to fix the underlying problems, there would be little benefit or purpose to requiring seven days&#8217; notice. For these reasons, [owner] was required to give [contractor] an opportunity to cure the breaches before termination.\u201d&nbsp;<\/p>\n\n\n\n<p>As it turned out, the court held that the owner had actually given the contractor the required seven days to cure the alleged issues on the project \u2013 simply based on the timing set forth in the termination notice \u2013 although the court certainly could have ruled the other way.<\/p>\n\n\n\n<p>All of this points to: unless your state does not follow the above-quoted \u201cfundamental\u201d equitable principles, it is wise to include in your contracts an express opportunity to cure \u2013 in a fixed or easily calculable duration \u2013 to avoid leaving it up to a court to determine whether a terminated contractor was given a sufficient opportunity to cure its project ills.<\/p>\n\n\n\n<p><a href=\"https:\/\/tinyurl.com\/2p9n6wzb\" target=\"_blank\" rel=\"noreferrer noopener nofollow\">Gray Constr., Inc. v. Medline Indus., Inc., 2023 U.S. Dist. LEXIS 34918 (D. Md. Mar. 1, 2023)<\/a><\/p>\n\n\n\n<hr class=\"wp-block-separator\"\/>\n\n\n\n<p><strong>When one of your cases is in need of a construction expert, estimates, insurance appraisal or umpire services in defect or insurance disputes &#8211; please call Advise &amp; Consult, Inc. at 888.684.8305, or email <a href=\"mailto:experts@adviseandconsult.net\" target=\"_blank\" rel=\"noreferrer noopener\">experts@adviseandconsult.net<\/a>.<\/strong><\/p>\n","protected":false},"excerpt":{"rendered":"<p>Daniel Lund III | Phelps Dunbar \u201cI never had a chance.\u201d&nbsp; Such was the plea of a general contractor to a Maryland federal court after having been terminated for failure to perform. \u201cThe Agreement provides no express right to cure,\u201d found the court, weighing in on the contractor\u2019s wrongful termination claim. Indeed, the contract was&hellip; <a class=\"more-link\" href=\"https:\/\/www.myconstructionexpert.com\/blog\/performance-bond-wrongful-termination\/\">Continue reading <span class=\"screen-reader-text\">Construction Litigation Roundup: \u201cI Never Had a Chance\u201d<\/span><\/a><\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"jetpack_post_was_ever_published":false,"_jetpack_newsletter_access":"","_jetpack_dont_email_post_to_subs":false,"_jetpack_newsletter_tier_id":0,"_jetpack_memberships_contains_paywalled_content":false,"_jetpack_memberships_contains_paid_content":false,"footnotes":"","jetpack_publicize_message":"","jetpack_publicize_feature_enabled":true,"jetpack_social_post_already_shared":true,"jetpack_social_options":{"image_generator_settings":{"template":"highway","enabled":false},"version":2}},"categories":[14,9],"tags":[9895,224,9894,11866],"class_list":["post-900984","post","type-post","status-publish","format-standard","hentry","category-construction-2","category-construction-contracts","tag-advise-consult","tag-construction-contract","tag-performance-bond","tag-wrongful-termination-claim","entry"],"jetpack_publicize_connections":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v25.0 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>Construction Litigation Roundup: \u201cI Never Had a Chance\u201d - Advise &amp; 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