Sub Breached Implied Time-Is-Of-The-Essence Agreement

Tuesday, February 05, 2019 8:52 am
 
February 2019 - Volume 41 Number 2
 

Breach of Contract

S.P. Drilling Servs. v. Cooper's Excavating LLC, 2019 Ohio App. Lexis 58 (January 8, 2019)

A trial court ruled, and the appellate court affirmed, that a sub breached the terms of its subcontract---which became a time-is-of-the-essence contract through implication---for failing to begin and complete a project on time. 

In 2016, the Ohio Department of Transportation awarded Cooper’s Excavating LLC (Cooper’s) an Adams County roadway improvement project contract. In March 2016, in lieu of a traditional, written subcontract, Cooper’s issued a purchase order to S.P. Drilling Services, Inc. (S.P.) to drill holes for excavation bracing in connection with the construction of a concrete box culver for $14,000. The purchase order contained no other terms, conditions, or specifications. 

The record shows that S.P. arrived on the job site and mobilized its equipment on Tuesday, April 5, 2016. It did not begin work then but planned to return on Friday. On Thursday, April 7, Cooper’s directed S.P. to remove its equipment as the work had already been completed by a replacement subcontractor at a significantly lower price. 

S.P. submitted an invoice in the amount of $12,204 for “Mobilization costs and Profit caused by Cooper’s Excavating LLC breach of contract.” Cooper’s refused to pay, and S.P. sued. The trial court ruled that S.P. breached the contract by failing to begin drilling on the agreed upon day. S.P. appealed, arguing that the purchase order did not contain a “time is of the essence” clause. The sub was unsuccessful.  

Written subcontract contained no timing

The key question here was whether S.P. had an obligation to begin the project work the same day it dropped off its equipment: Tuesday, April 5.  

According to S.P.’s president, Cooper’s knew that the sub could not perform the work---which consisted of drilling eight holes---on Wednesday, April 6 or Thursday, April 7 and had approved S.P.’s plan to return to perform on Friday, April 8.  In contrast, Cooper’s testified that it understood S.P. would begin its work on the day it arrived at the site: Tuesday, April 5. Cooper’s admitted that it was aware that S.P [..]

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