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Only a Contract Will Protect A General Contractor From Being Undercut by Subs

On Behalf of | Oct 16, 2014 | Construction Law |

The case of J.E. Dunn Const. Co. v. S.R.P. Development Ltd. Partnership decided by Judge Chasnow of the U.S. District Court for the District of Maryland essentially held, in dismissing a counterclaim, that a contractor (in this case an independent project manager who contracted directly with a subcontractor for performance of the non-management construction work) is owed no duty by that subcontractor not to circumvent the contractor/ p.m. by contracting directly with the owner to finish the work. A reading of the J.E. Dunn case makes it obvious that the contractor/project manager felt aggrieved by the perceived betrayal of the subcontractor which cut this contractor/p.m. out of a five percent commission. The Court was not unsympathetic to the contractor/p.m’s grievance; however, the Court made it clear that the contractor/project manager had an obligation to protect itself with the correct contractual language. In the J.E. Dunn case, no such contractual language existed. Contractors commonly complain that problems are caused by the appropriation or attempted appropriation of a project by a subcontractor. Protect yourself with the proper contractual language 

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