Archive: June 23, 2008

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Finding No Bad Faith, Court Enforces Termination for Convenience and Conversion Provisions Included in Parties’ Contract

Finding No Bad Faith, Court Enforces Termination for Convenience and Conversion Provisions Included in Parties’ Contract

Stony Brook Constr. Co. v. Coll. of N.J., 2008 WL 2404174 (N.J. Super. Ct. App. Div. June 16, 2008)

This appeal arose out of a lawsuit filed by a contractor, Stony Brook Construction Co. and its surety, Fidelity & Deposit Company of Maryland (F & D), against The College of New Jersey (TCNJ), in connection with the construction of a new three-story building on the TCNJ campus.  In August 1998, TCNJ entered into multiple prime contracts for the construction.  TCNJ retained Stony Brook to perform the general construction work for its bid price of $3,783,565.  The anticipated completion date for the project was August 17, 1999.  TCNJ retained a construction management firm, CMM, to coordinate and schedule the project.  Two TCNJ employees (Rogers and Bressler) were also designated as project supervisors.  Due to numerous delays and disagreements between the parties, the project remained unfinished as of the anticipated completion date.

In October 1999, TCNJ terminated its contract with Stony Brook for nonperformance.  On November 5, 1999, TCNJ and F & D executed a takeover agreement, by which F & D agreed to complete the work in exchange for the unpaid balance of the contract price.  Problems continued, and in September 2000, F & D ceased performance, claiming that TCNJ breached the takeover agreement.  TCNJ hired another contractor to complete the general construction. Read More

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