An electrical subcontractor was bound by the dispute resolution procedure contained in the prime contract. Until that procedure was exhausted, the subcontractor had no right to institute alternate proceedings against the general contractor, so held the United States Court of Appeals. The general contractor (McGaughan) had a contract with the Washington Metropolitan Area Transit Authority (WMATA) to perform finishing work at a station. McGaughan issued subcontracts for the electrical work (Seal) and the mechanical work (Kirlin). In this case, a dispute arose with regard to the performance and payment for fire line bonding. Both the electrical and mechanical subcontractors claimed that the work was not within their subcontracts. The WMATA directed that the work be performed at no additional cost. The electrical subcontractor agreed to perform the work under protest, whereas the mechanical subcontractor refused to undertake the work. After work was performed, Seal demanded payment from McGaughan, who refused. Seal then filed suit for breach of contract. Subsequently, a lower court permitted Seal's suit to go forward, and dismissed McGaughan's claim against Kirlin. A decision was rendered in favor of Seal, and an appeal followed. The court concluded that the lower court was in error in permitting Seal to file its claim directly against McGaughan and in dismissing McGaughan's third-party complaint against Kirlin. The court directed "to stay the proceedings pending the final outcome of the dispute settlemtn procedures outlined in seciton 6 of WMATA's General Provisions." Seal & Co., Inc. vs. A.S. McGaughan Co., Inc., 1907 F.2d 450 (4th Cir. 1990).

  • Availability:
  • Corporate Authors:

    Associated General Contractors of America

    2300 Wilson Boulevard, Suite 400
    Arlington, VA  United States  22201
  • Authors:
    • Simon, M S
  • Publication Date: 1991-4

Media Info

  • Pagination: p. 53
  • Serial:
    • Constructor
    • Volume: 73
    • Issue Number: 4
    • Publisher: Associated General Contractors of America
    • ISSN: 0162-6191

Subject/Index Terms

Filing Info

  • Accession Number: 00607515
  • Record Type: Publication
  • Files: TRIS
  • Created Date: Apr 30 1991 12:00AM