ACG, INC. v. Southeast Elevator, Inc.
912 S.W.2d 163 | Court of Appeals of Tennessee | 1995
What This Case Means for Subcontractors
Southeast Elevator, a subcontractor, sued general contractor ACG for failing to give required notice to start drilling work on a courthouse project. The court ruled that ACG breached its implied duty of good faith by not providing the five-day notice specified in the contract, which prevented Southeast from performing its work as planned. The court awarded damages to Southeast, including unpaid retainage. This case shows that general contractors must follow notice requirements in contracts—failure to do so can be treated as a material breach even if the contract language seems minor.
Key Takeaways
- •Get notice requirements in writing and confirm receipt. If your contract requires the GC to give you notice before starting work, document when you receive it and follow up immediately if it's late.
- •Preserve your right to damages for delayed notice. If a GC fails to notify you on time and you lose work or incur costs, document everything and notify the GC in writing that you're holding them responsible.
- •Don't assume small contract terms don't matter. A five-day notice requirement sounds minor, but courts will enforce it as a material obligation. Review all notice, timing, and condition clauses carefully before signing.
ACG materially breached its contract by failing to give five days notice to Southeast to commence its work.
Frequently Asked Question
Can a general contractor be held liable for not giving me notice to start work on time?
Yes. Courts treat notice requirements as material contract obligations. If your contract requires the GC to give you notice before you begin work and they fail to do so, that's a breach of the implied duty of good faith. You can recover damages for lost work, delays, and costs caused by the late or missing notice.
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