K & G Construction Co. v. Harris PDF

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Contracts II

Class 19

K & G Construction Co. v. Harris Court: Court of Appeals of Maryland (1960)

Facts: K & G Construction Co. (PL) subcontracted Harris and Brooks (DF) to aid in the construction of a subdivision. The DF performed work in July 1958, but was involved in a bulldozer accident, causing $3,400 of damage. The PL refused to pay the DF on or before August 10.

Issues: Does a contractor, damaged by a subcontract’s failure to perform a portion of his work in a workman-like manner, have a right to withhold installment payment due to the contractor.

Procedural History: PL filed suit alleging damage to the house & negligence and $450 for having another subcontractor.

Judgement: Reversed in favor of the PL.

Reasoning: The modern rule, with almost universal application, is that there is a presumption that mutual promises in a contract are dependent and are to be so regarded, whenever possible. The intention of the parties, the nature of the contract, the relation of the parties, and other admissible evidence to assist the court in determining the intention of the parties is the controlling factor in determining whether the promises and counter promises are dependent or independent. Therefore, in this case, the subcontractor’s accident was found to be a material breach, (resulting in more than double cost, making it total) and permitting the nonperformance of the PL.

Rules: A party has the freedom to refuse performance of a dependent promise when the other party has refused or failed to perform their end of the bargain....