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Flower City Painting Contractors, Inc. v. Gumina Constr. Co - 591 F.2d 162 (2d Cir. 1979)

Rule:

The habitual or customary practice is that painting subcontracts be awarded on an entire project basis. Such usage, if operative, may be proved by parol. But proof of the usage is not enough by itself to establish the meaning of the contract, for a party cannot be bound by usage unless he either knows or has reason to know of its existence and nature.

Facts:

Plaintiff Flower City instituted an action for breach of contract against defendant general contractor, Gumina Construction Company. Gumina entered into a prime contract for the construction of a garden-type apartment project that was federally funded. Gumina executed a sub-contract with plaintiff Flower City, which later asserted in a letter that it was not obligated to paint interior walls of individual apartment units. Defendant Gumina subsequently cancelled the contract, and plaintiff Flower City sued for damages. The complaint was dismissed by the district court, and plaintiff appealed.

Issue:

Was the subcontractor entitled to recover damages based on its contract with the general contractor?

Answer:

No.

Conclusion:

The judgment was affirmed on the ground that there never existed an enforceable contract. The court held that, using the objective criterion of the judgment, there was never a meeting of the minds in the first instance and that, hence, there was never a contract enforceable by either party. Plaintiff was a neophyte minority painting contractor and  the court stated that it would be unrealistic to hold it strictly to a "reason to know" standard of trade usage.

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