John Mark Goodman | BuildSmart
Construction law is largely a matter of contract law. Yes, there are federal and state statutes that deal with construction issues and, yes, construction cases sometimes involve tort claims, but more often than not, construction disputes revolve around the parties’ contract. What constitutes the parties’ contract is frequently undisputed. As one developer learned last week, that is not always the case (see Apogee Wasau Group, Inc. v. PMC Property Group, Inc., 2024 WL 2057359 (E.D. Pa.)).
Apogee involves non-payment claims brought by the curtain wall supplier on a mixed-use project in Philadelphia. The contract that formed the basis for the supplier’s claim was a quote confirmation between the supplier and the defendant, the developer on the project. The quote confirmation included a no-damages-for-delay clause. The developer counterclaimed for delay damages citing a First Amendment to quote confirmation that purportedly amended the original contract and allowed delay damages. The First Amendment to quote confirmation was signed by both the supplier and the developer, however the developer’s signature line indicated that the developer signed on the owner’s behalf and “solely as agent for the owner.” In light of that, the court held the First Amendment was not part of the operative contract between the parties before the court and therefore could not form the basis of the developer’s counterclaim. The court reasoned as follows:
It is axiomatic that there must be mutual assent, that is a meeting of the minds between the parties for a contract to be formed. With exceptions not relevant here, only a party may sue or be sued for breach of that contract… Here [Developer] signed the First Amendment on behalf of the [Owner]. The First Amendment is replete with references to the Owner and to [Supplier]. Nowhere does [Developer] purport to assume any liability. Thus [Developer] is not a party to the First Amendment and could not be properly sued for any breach of it. Moreover, as noted above, the First Amendment specifically precludes any third party beneficiary claims. Since [Developer] is not a party to the First Amendment and signed only as an agent of a disclosed principal, [Developer] cannot invoke it as a sword to recover damages for itself or to obtain any other relief such as a setoff. Only [Supplier] and the Owner, which is not a party to this lawsuit, have any rights or obligations under the First Amendment.
Based on this holding, the court dismissed the developer’s counterclaim for delay damages insofar as it relied upon the First Amendment, which was a separate contract between the supplier and the owner but did not really “amend” anything. A copy of the court’s decision is available here.
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