STEWARD MACH. CO., INC. v. White Oak Corp.
462 F. Supp. 2d 251 | District Court, D. Connecticut | 2006
What This Case Means for Subcontractors
Steward Machine Company supplied machinery to White Oak Corp. for a Connecticut bridge project but wasn't paid in full and had to store the equipment for years. The court ruled that White Oak must pay Steward for both the machinery and storage costs. The key finding: White Oak's payment obligation to Steward was not dependent on whether the state (ConnDOT) paid White Oak first. This protects subcontractors from being caught in payment chain delays.
Key Takeaways
- •Your right to payment from the general contractor does not depend on the GC receiving payment from the project owner—get this in writing in your contract
- •You can recover storage and holding costs if a GC fails to accept delivery or pay on time—document all storage expenses carefully
- •A written purchase order contract is strong evidence of payment obligations and will be enforced even if the GC claims it's waiting for owner payment
Payment by ConnDOT was not a prerequisite to White Oak's obligation.
Frequently Asked Question
Can a general contractor refuse to pay me because the project owner hasn't paid them yet?
No. This case confirms that your payment obligation from the GC is separate from their payment from the owner. The GC cannot use delayed owner payment as an excuse to withhold your money. Make sure your contract clearly states payment terms are not conditional on the GC receiving funds from above.
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