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Construction Law

: The South Carolina Construction Law Blog

"Or Equal" is not Always Equal

By Ryan McCabe

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A subcontractor was ordered to pay $240,000 plus attorney fees and court costs to the general contractor after a dispute arose concerning an "or equal" provision in the contract. The contract engineer specified that the wastewater treatment project required a Linabond brand "or equal" tank liner. Because the sub only installs Ameron liners, it contacted Ameron to determine whether the two liners were in fact equal. After receiving assurance that they were, the sub informed the general contractor its intent to use another liner and submitted a subcontract bid. The subcontractor later failed to incorporate its original bid into the signed subcontract.

The engineer determined, pursuant to his discretion, that the two liners were not in fact "equal." With the possibility of triggering liquidated damages for failing to complete the job on time, the sub was faced with the option of installing the Linabond liner itself or paying to have a specialist install it. The sub opted instead to sue the general contractor for breach of contract and try to terminate the contract.

In the meantime, the general contractor paid to have someone else install the specified liner then sued the subcontractor to recoup these costs. The court looked to the subcontract which defined the subcontractor's scope of work as "that required in the main contract." The court found for the general contractor and awarded it a sizable judgment.

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Full post as published by The South Carolina Construction Law Blog on October 16, 2010 (boomark / email).