Law School Case Brief
Schindler Elevator Corp. v Tully Constr. Co., Inc. - 139 A.D.3d 930, 30 N.Y.S.3d 707, 2016 N.Y. App. Div. LEXIS 3720
Where a construction contract contains a condition precedent-type notice provision setting forth the consequences of a failure to strictly comply, strict compliance will be required. Express conditions precedent must be literally performed; substantial performance will not suffice, and failure to strictly comply with such provisions generally constitutes a waiver of a claim.
In 2000, defendant Tully Construction Co. entered into a contract with the City of New York Department of Sanitation (City) to construct a garage. In August 2003, Tully entered into a subcontract with plaintiff Schindler Elevator Corp, pursuant to which Schindler was to furnish and install five elevators for the project. Article 11 of the primary contract between Tully and the City, which was incorporated into the subcontract, contained a condition-precedent type notice provision. It required the contractor claiming to be sustaining delay damages to submit “within forty-five (45) days from the time such damages were first incurred, and every thirty (30) days thereafter for as long as such damages were incurred, verified statements of the details and amounts of such damages, together with documentary evidence of such damages.” Subsequently in 2010, Schindler commenced the present action against Tully to recover damages allegedly incurred as a result of the delays in the performance of the work. After a nonjury trial, the trial court found that plaintiff Schlinder was entitled to delay damages in the principal sum of $209,235.36. It rejected the defendant Tully’s contention that Schindler waived its claim for delay damages by failing to comply with a contractual notice requirement. Plaintiff Schindler appealed.
By failing to comply with a contractual notice requirement, did plaintiff Schindler Elevator Company waive its claim for delay damages?
The appellate court held that Schindler, a subcontractor, was not entitled to delay damages because the plaintiff’s letters and emails to the defendant did not contain verified statements of the amount of delay damages and, as such, the plaintiff did not strictly comply with the contractual notice requirement. Contrary to the plaintiff's contention, the defendant's actual knowledge of the delay and the claims did not relieve the plaintiff of its obligation to serve a proper notice of claim, and the defendant's alleged breach of the subcontract did not excuse the plaintiff from complying with the notice requirements under the circumstances of this case.
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