What referenced item in the subcontract was not attached to the contract documents?

(10 pts): What referenced item in the subcontract was not attached to the contract documents?
(10 pts): What did the parties do to recognize or rectify the issue in question #1?
(5 pts each): Did the contract documents have a liquated damages clause? If so, how much was it?Did the contract documents have an incentive payment clause? If so, how much was it?
(10 pts): Did the court award the subcontractor delay damages under any specific written provision of the contract documents? Why or why not?
(10 pts): What was the subcontractor’s alternative (or second) theory for seeking damages?

Attachments:Howard P. Foley Co. v. J. L. Williams & Co., Inc., 622 F.2d 402 (1980)
© 2019 Thomson Reuters. No claim to original U.S. Government Works. 1
622 F.2d 402
United States Court of Appeals,
Eighth Circuit.
The HOWARD P. FOLEY COMPANY, Appellant,
v.
J. L. WILLIAMS & CO., INC., Highlands Insurance
Co., and Standard Brands, Inc., Appellees.
No. 79-1867.
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Submitted April 15, 1980.
|
Decided June 5, 1980.
Synopsis
In an action by subcontractor against project owner and
prime contractor, the United States District Court for the
Western District of Arkansas, Paul X. Williams, Chief
Judge, adjudged that under either of two theories the
construction contract did not provide the subcontractor
with delay damages. On appeal by the subcontractor,
the Court of Appeals, Ross, Circuit Judge, held that: (1)
although construction contract provided right to owner
to claim damages for delay, general contractor and thus
subcontractor did not, under Arkansas law, have such
contractual right by substitution; (2) under Arkansas law,
“time-is-of-the-essence” clause as found in subcontract
was relevant only to owner’s right and was not intended to
implicitly provide right to delay damages for other parties;
but (3) extension-of-time clause that if contractor or
subcontractor be delayed at any time in progress of work
by any act or neglect of owner or contractor then time of
completion should be extended might be indicative that
contractor did not obligate itself to complete certain work
by certain time, but did not necessarily provide exemption
from damages for hindering or delaying performance in
violation of implied contract provision.
Affirmed in part and remanded in part.
Attorneys and Law Firms
*403 Thomas J. Wingfield, Varner, Stephens, Wingfield,
McIntyre & Humphries, Light Tower, Atlanta, Ga.
(argued), and H. Clay Robinson, Pryor, Robinson, Taylor
& Barry, Fort Smith, Ark., on brief, for appellant.
L. Cody Hayes, Warner & Smith, Fort Smith, Ark., for
Standard Brands, Inc.
L. W. Anderson (argued), and Marvin Jones, Dallas, Tex.,
on brief, for J. L. Williams & Co., Inc.
Before LAY, Chief Judge, ROSS, Circuit Judge, and
LARSON, District Judge. *
Opinion
ROSS, Circuit Judge.
This action arose out of the construction of a nut
processing plant and warehouse in Fort Smith, Arkansas.
A contract was entered into between appellee Standard
Brands, Inc. (Standard Brands), the project owner, and
appellee J. L. Williams & Co., Inc. (Williams), the prime
contractor. A number of subcontractors were retained to
work on the project, including appellant, The Howard P.
Foley Company (Foley), who was hired to do the electrical
work. Appellee Highlands Insurance Co., was the surety
for Williams.
Foley and Williams entered into a contract whereby
Foley agreed to perform all the work and furnish all
materials outlined in the owner’s specifications dealing
with electrical work. The subcontract was a standard
form, but typewritten onto the form was the following
paragraph:
Time is of the essence in this contract.
J. L. Williams & Co., Inc. has agreed
to a liquidated damage clause in
our contract with the owner. It is
therefore imperative that the Bar Chart
Schedule attached to this contract be
strictly adhered to and any delays
or deviations from this schedule be
brought to the immediate attention of
J. L. Williams & Co., Inc.
The paragraph was followed by a handwritten note, “No
chart included,” which was initialed by a representative of
appellants.
The subcontract also provided as follows:
Howard P. Foley Co. v. J. L. Williams & Co., Inc., 622 F.2d 402 (1980)
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1. (a) The parties agree that in the event the Owner
makes changes in the work to be performed by Contractor
which increases or decreases the work or cost of work of
the Subcontractor the Subcontract price will be changed
accordingly, providing that such increases or decreases are
approved in writing prior to such changes.
(b) * * * The Subcontractor shall prosecute the work
undertaken in a prompt and diligent manner whenever
such work, or any part of it, becomes available, or
at such other time or times as the Contractor may
direct, and so as to promote the general progress of the
entire construction, and shall not, by delay or otherwise,
interfere with or hinder the work of the Contractor or any
other subcontractor. * * * The Subcontractor agrees to
pay Contractor for any and all damages which are caused
by Subcontractor’s failure to furnish the materials and/or
perform the work required by this Subcontract in the time
and manner provided herein.
There was no corresponding clause in this instrument
whereby the contractor assumed liability to the
subcontractor for delay occasioned by the acts of the
contractor.
Foley contended that the subcontract incorporated all the
provisions of the main contract between Standard Brands
and Williams (hereinafter the specifications), and the trial
court analyzed the issues in terms of this incorporation. 1
Foley sought damages *404 for delay in finishing the
project on the theories that delay damages are recoverable
under the terms of the contract and that appellees
Williams and Standard Brands wrongfully interfered with
appellant’s performance of the contract.
The trial court issued a memorandum opinion and
judgment in which it declared that under either theory the
contract did not provide Foley with delay damages. We
affirm in part and reverse in part.
I. Contractual Damages.
Of pivotal importance in the trial court’s decision was
Section 1B of the specifications:
07. TIME OF COMPLETION :
(A) It is the desire of the Owner to have the work
completed by May 1, 1975.
(B) The Contractor shall stipulate on the Bid Proposal
Form the number of calendar days required to complete
the work. Based on the Contractor’s stipulated time, the
sum of $3,000.00 per day will be assessed against the
Contractor for failure to complete the work within the
stipulated time for causes beyond his control as set forth
in the General Conditions.
(C) 1. It is essential that the two-story portion of the
facility be watertight and in a condition to receive
processing and packaging equipment for installation by
December 15, 1974.
2. The Owner agrees to pay the Contractor the sum of
$1500.00 per day as a bonus if the two-story portion of
the facility is completed as stated above and if all work
is completed prior to May 1, 1975 and the facility is
completely operational.
3. Any authorized extension of time beyond May 1, 1975
for any reason, will preclude the payment of the bonus.
(D) The time set for completion for work to be done under
this contract is an ESSENTIAL condition of the contract.
The trial court decided that the contract allowed the
owner a right to claim damages for delays but omitted a
corresponding provision for the benefit of the contractor.
Instead, the contractor was provided a bonus if he
gave timely performance. Although Article 42(d) 2
of the
specifications bound the contractor to the subcontractors
by all the obligations that owner assumed to contractor, a
substitution of parties in the time of completion paragraph
does not result in a payment of delay damages by
contractor to subcontractor. Owner in the specifications
did not expressly agree to pay delay damages and
substituting the parties by incorporation (contractor for
owner and subcontractor for contractor) does not result
in the contractor derivatively assuming delay obligations
towards subcontractor.
Foley on appeal quotes Section 1C, Article 26(e) of the
specifications which provide for an extension of time:
“This Article does not exclude the recovery of damages
for delay by either party under other provisions in the
Contract Documents.” 3
He *405 contends that these
damages are due under Section 1C, Articles 24, 25 and 29
of the specifications. These Articles provide for changes
Howard P. Foley Co. v. J. L. Williams & Co., Inc., 622 F.2d 402 (1980)
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and extra work, 4
claims for extra cost and damages, 5
and suspension of work. 6
In addition to mentioning that
these sections *406 have writing or notice requirements,
compliance with which was not decided by the trial court,
appellees claim that the law in Arkansas is to the effect
that “the parties contract with a view to the possibility
of delay and if damages for delay are to be recovered the
contract must contain an express provision to that effect,”
citing Blair v. United States, 147 F.2d 840, 849 (8th Cir.
1945). This was stated by the Supreme Court of Arkansas
in Brown & Froley v. Monroe County Road Imp. Dist.,
153 Ark. 606, 612, 241 S.W. 39, 41 (1922):
It must be presumed that the parties were contracting with
reference to all the conditions confronting them at the
time, such as weather conditions and the difficulties to
be encountered in obtaining gravel in sufficient quantities
to keep appellants’ forces steadily employed. Since the
contract does not contain any such provision, liability
of appellees predicated upon a breach of such provision
cannot be maintained. If the appellant contemplated that
such a duty and obligation should rest upon the appellees,
then they should have seen to it that the contract contained
such a provision. In the absence of such contractual duty
and obligation, no damages can be recovered by the
appellants as for a breach of contract in this respect.
The district court found that although the contract
provided a right of the owner to claim damages for delay,
the general contractor and thus the subcontractor, Foley,
by substitution, did not have this contractual right. We
agree.
Additionally the district court determined that Arkansas
has never interpreted a “time-is-of-the-essence” clause, as
found in the subcontract, to implicitly give rise to damages
for delay in construction contracts. The court found that
in this particular contract, the “time-is-of-the-essence”
clause was relevant only to the owner’s right and was not
intended to implicitly provide a right to delay damages
for other parties. We agree and affirm the district court’s
finding that no delay damages are recoverable for Foley
under the express terms of this contract.
II. Wrongful Prevention.
Foley additionally argues that appellees wrongfully
prevented appellant from performing the contract.
Appellant’s original and second amended complaint
charged that Williams and Standard Brands “obstructed,
hindered, interfered with and delayed the performance of
plaintiff’s work.” Foley charges it did not have sufficient
time to complete its work because Williams and Standard
Brands failed to erect the structural steel in sufficient time;
Williams failed to coordinate the project; and Williams
and Standard Brands failed to furnish steel and machinery
in accordance with the contract schedule.
The Supreme Court of Arkansas has awarded damages
due to delay on the basis of unreasonable hindrance. In
Housing Authority v. Forcum-Lannom, Inc., 248 Ark.
750, 454 S.W.2d 101 (1970) the contract provided that the
plaintiff-contractor should notify the defendant’s engineer
when the utility lines to be removed were encountered
so that this engineer could notify the local owner and
“attempt to get prompt action.” The court specifically
found:
(T)hat the defendant was under a
duty of cooperation to do whatever
was necessary in the project area
to enable plaintiff to perform its
contract in an orderly manner and
that defendant breached this duty in
that it failed to use its best efforts
to secure the removal of the utilities,
underground and overhead, and that
such failure unreasonably hindered
and delayed *407 the contractor in
the performance of the contract.
Id. 454 S.W.2d at 104. Additionally, the court found in
general:
(T)hat there were numerous and
disrupting delays and suspensions, and
that the contractor was never in a
position to plan and follow any normal
sequence in which the work was to
be done on the project; that such
delays and suspensions of work in
excess of those which a contractor
could or should reasonably anticipate
as being normal, usual and customary
Howard P. Foley Co. v. J. L. Williams & Co., Inc., 622 F.2d 402 (1980)
© 2019 Thomson Reuters. No claim to original U.S. Government Works. 4
in the performance of a contract of this
nature.
Id.
In addition to his argument based on the express terms of
the contract, Foley bases his wrongful prevention claim on
the existence of an implied provision in every contract:
It is hornbook law that an implied
provision of every contract is that
neither party to the contract will
do anything to prevent performance
thereof by the other party or commit
any act that will hinder or delay
performance.
Peter Kiewit Sons’ Company v. Summit Construction
Co., 422 F.2d 242, 257 (8th Cir. 1969), and Investors
Thrift Corporation v. Hunt, 387 F.Supp. 517, 524
(W.D.Ark.1974), aff’d, 511 F.2d 1161 (1975).
This implied obligation was recognized in L. L. Hall
Construction Company v. United States, 379 F.2d 559,
563, 177 Ct.Cl. 870 (1966):
(I)t is clear from the cases cited by
the parties and the numerous other
decisions of this court, that where
the Government unreasonably hinders
or delays a contractor’s performance,
even though it does not prevent the
eventual completion of the contract, it
has breached its implied obligation not
to delay the contract, in the absence
of a clause expressly exempting it from
such liability.
We are aware of the existence of an extension of time
clause, Section 1C, Article 26, 7
in the specifications of this
present case and that if the “Contractor (subcontractor)
be delayed at any time in the progress of the Work by
any act or neglect of Owner (contractor) * * * then the
time of completion shall be extended * * *.” Although
such a clause, in conjunction with additional facts, may
be indicative that a defendant did not obligate itself
to complete certain work by a certain time, Burgess
Construction Company v. M. Morrin & Son Company,
Inc., 526 F.2d 108, 114 (10th Cir. 1975), cert. denied, 429
U.S. 866, 97 S.Ct. 176, 50 L.Ed.2d 146 (1976), it does
not necessarily provide an exemption from damages for
delay. In Commerce International Company v. United
States, 338 F.2d 81, 167 Ct.Cl. 529 (1964) the plaintiffcontractor’s only recourse for delay was to seek an
extension of the time of his performance as the contract
was absent any warranty for delay damages. However, the
court remarked:
But this general principle presupposes that the
Government has met the ever-present obligation of any
contracting party to carry out its bargain reasonably
and in good faith. * * * It would be intolerable if the
Government could disregard that responsibility, or were
free to stretch its tardiness for however long it fancied,
without sterner control than the mere prolongation of the
completion date of the contract.
Id. at 85.
In the present case, it may be Foley’s burden to prove
that any unreasonable or undue delay was tied to
appellees’ breach of their implied obligation of reasonable
cooperation. However, we cannot find in the district
court’s decision that a ruling was made on this issue. We
therefore find that the court failed to rule on appellant’s
theory of an implied obligation and remand this issue to
the district court for a decision based upon the evidence
already presented. 8
*408 The judgment of the district court is affirmed in part
and remanded in part for further decision in accordance
with this opinion.
All Citations
622 F.2d 402
Howard P. Foley Co. v. J. L. Williams & Co., Inc., 622 F.2d 402 (1980)
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Footnotes
* The Honorable EARL R. LARSON, Senior United States District Judge for the District of Minnesota, sitting by designation.
1 The subcontract between Foley and Williams also provided:
Article 1. The Subcontractor agrees to furnish all material and perform all work as described in Article 2 hereof in
the construction of a nut processing and warehouse facility, Ft. Smith, Arkansas, for Planters Peanuts Division of
Standard Brands, Inc., hereinafter called the Owner, as per plans and specifications prepared by A. Carl Schenck &
Associates, hereinafter called “Engineer,” as follows: Specifications dated March 22, 1974, and plans dated March 22,
1974, and Addenda 1 through 6, Revision Dates: April 9, 1974, and June 5, 1974, all of which are made a part of
this Subcontract; said plans, specifications, addenda and other documents set forth being hereinafter referred to as the
“Contract Documents”; * * *
and Article 3. * * *
This Subcontract and the Contract Documents, insofar as they relate in any part or in any way to the work undertaken
herein, constitute the entire agreement between the parties hereto, * * *.
Section 1C, Article 42(c) of the specifications (main contract) related:
The provisions of this Contract shall be incorporated, by reference, in all subcontracts * * *.
2 Section 1C, Article 42(d):
Contractor shall be bound to each Subcontractor by all of the obligations that Owner assumes to Contractor, and each
Subcontractor shall be bound to Contractor by all the obligations that Contractor assumes to Owner, under the provisions
of this Contract.
3 The other parts of this Article indicate that listed delays or delays due to “act or neglect of Owner” were to be resolved
by extension of the time for completion:
ARTICLE 26 DELAYS AND EXTENSIONS OF TIME
a. If Contractor be delayed at any time in the progress of the Work by any act or neglect of Owner or the Architect or
Engineer, or of any employee of either, or by any independent contractor employed by Owner, or by strikes, lock-outs, fire,
flood, unavoidable casualties or any similar causes beyond Contractor’s control, or by delay authorized by the Engineer
pending arbitration, or by any cause which the Engineer shall decide to justify the delay, then the time of completion shall
be extended for such reasonable time as the Architect or Engineer may decide.
b. Authorized changes and extra Work, ordered under the provisions of Article 24 of the General Conditions, which require
additional time shall entitle Contractor to a proportionate extension of time which shall be determined by the Architect
or Engineer, if Contractor so requests, in writing.
c. No such extension shall be made for delay occurring more than seven days before claim therefore (sic) is made in
writing to the Engineer. In the case of a continuing cause of delay, only one claim is necessary.
d. If no schedule or agreement stating the dates upon which Drawings shall be furnished is made, then no claim for delay
shall be allowed on account of failure to furnish drawings until two weeks after demand for such drawings and not then
unless such claim be reasonable.
4 Section 1C, Article 24 in part provides:
CHANGES AND EXTRA WORK
a. Owner, without invalidating the Contractor, may order extra work or make changes by altering, adding to or deducting
from the Work, the contract sum being adjusted accordingly. All such Work shall be executed under the conditions of
the original contract except that any claim for extension of time caused thereby shall be adjusted at the time of ordering
such change.
b. In giving instructions, the Engineer shall have authority to make minor changes in the work, not involving extra cost,
and not inconsistant (sic) with the purposes of the Project. Except in an emergency endangering life, limb or property,
no other extra work or change shall be made unless in pursuance of a written order from Owner, and no claim for an
addition to the contract sum shall be valid unless so ordered.
5 Section 1C, Article 25:
CLAIMS FOR EXTRA COST AND DAMAGES
a. If Contractor claims that any instructions by Drawings or otherwise involve extra cost under this Contract, he shall give
Owner and the Engineer written notice thereof within 48 hours after receipt of such instructions, and in any event before
proceeding to execute the Work, (except in emergency endangering life, limb, or property) and the procedure shall then
be as provided for changes in the Work. No such claim shall be valid unless so made.
Howard P. Foley Co. v. J. L. Williams & Co., Inc., 622 F.2d 402 (1980)
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b. If Contractor has any claims for damages against Owner because of any wrongful act or neglect of Owner or anyone
employed by him, then such claim shall be made in writing to Owner within a reasonable time of the first observance of
such damage. If Contractor and Owner are unable to reach an agreement, the matter shall be submitted to arbitration.
6 Section 1C, Article 29:
SUSPENSION OR STOPPAGE OF WORK
a. Owner may, at any time, suspend the Work, or any part thereof, by giving ten days’ notice to the Contractor in writing.
Contractor shall provide temporary protection for the completed portions of the suspended Work. The Work shall be
resumed upon ten days’ written notice from Owner.
b. In case of such suspension of all or part of the Work causing additional expense not due to the fault or negligence
of Contractor, Owner shall reimburse Contractor for the additional expense incurred due to suspension of the Work,
provided, however, that this paragraph shall not be construed as entitling Contractor to compensation for delays due to
inclement weather, delays due to failure for surety, for suspension or extension of time made at the request of Contractor
or for any other delay provided for in the Contract Documents. Claims for such compensation, with complete substantiating
records, must be filed with the Architect or Engineer within ten days after the date of order to resume Work in order to
receive consideration.
c. If the Work, or any part thereof, shall be stopped by the notice in writing aforesaid, and if Owner does not give notice
in writing to the Contractor to resume Work at a date within one year of the date fixed in written notice to suspend, then
Contractor may abandon that portion of the Work so suspended, and he will be entitled to the estimates and payments
for all Work done on the portions so abandoned, if any.
d. If the Work should be stopped for a period of two consecutive months or more through no fault of Owner, then Owner
may order a permanent stoppage of the Work on seven days’ written notice to Contractor. Contractor shall thereupon
consult with the Architect or Engineer and proceed to do any Work which may be required to protect the Work already
done, after which he shall remove all his equipment and tools. Except for the aforesaid special protective Work, which shall
be compensated for as “extra Work”, the amount which Contractor may recover from Owner in the event of termination
under this Article will be Contractor’s reasonable costs incurred on the Work up to termination (including the loss on
materials that have been purchased for use in the Work and must be resold) plus 10%, but will not exceed such portion
of the contract price as is proportionate to the amount of Work done, as determined by the Architect or Engineer.
7 See n. 3.
8 Appellees claimed that appellant did not properly plead its theory of an implied obligation. However, as heretofore
indicated, this implied provision not to hinder or prevent performance was pled in appellant’s original and second amended
complaints. In the original complaint appellant stated “Defendant Williams, and parties for whose actions Defendant
Williams is legally liable to Plaintiff, obstructed, hindered, interfered with and delayed the performance of Plaintiff’s work.”
In appellant’s second amended complaint, appellant alleged, “STANDARD BRANDS, and parties for whose actions
STANDARD BRANDS is legally liable to Plaintiff, obstructed, hindered, interfered with, prevented and delayed the
performance of Plaintiff’s work on the Project, thereby causing substantial damage to Plaintiff.”
End of Document © 2019 Thomson Reuters. No claim to original U.S. Government Works.