Home > Uncategorized > Ted Jacob Engineering v. Ratcliff Architects Affirms right to Extra Work Compensation by Subcontractor

Ted Jacob Engineering v. Ratcliff Architects Affirms right to Extra Work Compensation by Subcontractor

In Ted Jacob Engineering Group, Inc. v. The Ratcliff Architects (2010), No. A122932, the First District Court of Appeals affirmed the right of a subcontractor to recover for extra work performed but not formally issued by a change order.  This was a mechanical and electrical engineering subcontractor’s suit against defendant as architects, for breach of contract and other causes of action in connection with a city hospital renovation and expansion project in San Mateo County, CA.  The judgment of the trial court was affirmed and the appellate court held that 1) in the absence of a negotiated agreement upon price, and assuming no contrary contractual provision applies, a subcontractor may still pursue a claim seeking a judicial determination of additional fees when it performs work demanded of it by the general contractor constituting a material change in the scope of work defined under the contract; and 2) if good faith negotiation between the parties fails to result in agreement on price, the subcontractor is not required to elect between the job and forfeiting its right of recovery if it elects to perform the required work.  In Footnote 5, the appellate court also noted that in a prior appeal that the relevant subcontract had an unenforceable provision that provided "receipt by [Ratcliff] of funds from [the County] for work performed by [TJEG] is a condition precedent to [Ratcliff’s] obligation to pay for work performed by [TJEG]," noting it had been conceded that such a "pay-when-paid" clause is unenforceable as void as against public policy.

Nothing herein should be construed as legal advice or creating any attorney-client relationship. Please consult with an attorney for specific legal advice. Thank you.

All Rights Reserved © 2010 by Michael L. Mau, Esq.

The Mau Law Firm

Blog: http://maulaw.spaces.live.com

Website: www.MauLaw.com

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