Wednesday, December 25, 2013

Peacock Construction Co. v. Modern Air Conditioning, Inc. case brief

Peacock Construction Co. v. Modern Air Conditioning, Inc. case brief summary
353 So.2d 840 (1977)

CASE SYNOPSIS
Petitioner, a general contractor, appealed an order from the Second District Court of Appeal (Florida), which affirmed the decision granting summary judgment in favor of respondent subcontractors in their breach of contract action.

CASE FACTS
Respondent subcontractors entered into an agreement with petitioner contractor to do work on a construction project. After respondents completed the work, petitioner refused to make final payment contending that it had not received final payment from the owner. Respondents initiated a breach of contract action and were granted summary judgment. Petitioner contended the parties' agreement provided that the owner's payment was a condition precedent to petitioner's duty to perform.

DISCUSSION

  • The court affirmed the decision because the payment by the owner was not a condition precedent to petitioner's duty to pay respondents. 
  • The parties' agreement was ambiguous regarding the payment provision, so that such ambiguity was resolved in respondents' favor. 
  • Respondents were small subcontractors who would usually not assume the risk that the owner would not pay petitioner. 
  • If the parties wanted to shift the burden of risk from petitioner to respondents, the parties' agreement could have provided such provision.
CONCLUSION
The court affirmed the decision granting summary judgment in favor of respondent subcontractors because the owner's payment to petitioner was not a condition precedent of petitioner's duty to pay respondents. Respondents did not assume the risk that the owner would not pay petitioner in the parties' agreement.

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