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United States for Use of Susi Contracting Co. v. Zara Contracting Co.

United States Court of Appeal for the Second Circuit
146 F.2d 606 (2d Cir. 1944)


Facts

On March 4, 1941, Zara Contracting Co. (Zara) (defendant) entered a contract with the United States, whereby Zara agreed to construct an extension to an airport. On April 2, 1941, Zara entered a subcontract with Susi Contracting Co. and D’Agostino & Cuccio, Inc. (plaintiffs) to perform all of the work required under the main contract. Article 5 of the subcontract stated that no representations had been made regarding the subsurface conditions, and that the plaintiffs could not make a claim for damages due to unknown conditions. During excavation, the plaintiffs discovered unexpected soil conditions that caused difficulty in the performance of the work and required work not called for under the main contract. The plaintiffs demanded more money for their work. Zara refused and, two months after the plaintiffs began work, took over the work itself. The plaintiffs sued Zara, alleging wrongful termination of the subcontract. They sought, among other things, the reasonable value of their work. The district court found that Zara had wrongfully terminated the contract and owed the plaintiffs $39,107.10 for the plaintiffs’ services and $18,600.00 for the increased cost of excavation. Zara appealed, challenging the plaintiffs’ entitlement to the $18,600.00 for the increased costs.

Rule of Law

Issue

Holding and Reasoning (Clark, J.)

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