It’s Business, And It’s Personal

Breach of contract over payments is common business dispute

On Behalf of | Jul 9, 2014 | Business Litigation |

In North Carolina and all other jurisdictions, it’s not uncommon to see a business dispute that leads to litigation during the construction of a major municipal project. In one city, for example, a crane rental company is suing a contractor that is using its cranes. The company claims that the contractor has committed a breach of contract in not paying its bills on the cranes for some eight months, to the tune of a $168,199 alleged balance due.

The defendant contractor is playing a major role in the construction of a new hockey rink and convention center, along with a hotel and office building complex. The project has been billed by officials as the re-vitalizing miracle that the depressed downtown area has needed. The lawsuit was filed in the state court and asks for basic breach of contract damages for failure to pay.

The defendant has come up with several defenses, including over-pricing, failure to credit some payments, and charging rates that exceed the prevailing price. The defendant is in a defensive position, however, and obviously owes a substantial amount of the bill claimed due. The problem is that the plaintiff has sued the city of Allentown, Pennsylvania authority, the head general contractor, the arena developer, and other entities all listed as beneficiaries of the cranes that have not been allegedly paid for.

As sometimes happens in such business disputes, the general contractor in this case stopped paying the defendant crane operator’s bills when it learned of the dispute. That made it even more difficult for the crane operator to pay its bills back to the crane rental company, creating a classic circular dilemma. The parties are in negotiations and will be expected to get their differences settled quickly in order to prevent further disruptions of this vital construction project. This sequence of events is not uncommon, whether in North Carolina or elsewhere. In the construction business, breach of contract disputes over payments happen regularly, but are usually resolved, allowing business to go on as usual.

Source: The Morning Call, “Allentown arena’s construction cranes subject of lawsuit“, Scott Kraus, June 26, 2014