Home -> Law Blog Directory -> Construction Law Blogs -> The South Carolina Construction Law Blog
(866) 635-2689 for Personal Injury or (866) 635-9402 for Criminal Defense
Find a Local Lawyer
Divorce (866) 635-6190
Personal Injury (866) 635-2689
Criminal Defense (866) 635-9402
Construction Law
: The South Carolina Construction Law BlogA Surety's Potential Liability
By Ryan McCabe
RLI Ins. Co. v. Indian River School Dist., 556 F. Supp. 2d 356 (D. Del. 2008).
A surety was found responsible for a contractor?s financial obligations resulting from overpayment by owner. The owner made payments in reliance on payment applications submitted by the architect that did not reflect the actual construction progress. Upon learning of the nonconformity, the owner terminated the contractor.
The surety sued the architect, construction manager (CM), and the owner for negligent misrepresentation, seeking to avoid having to pay the owner. The court concluded that the presented facts warranted a judgment in defendants? favor. It found that the surety did not have a claim against the architect and CM because there was neither a contract with them, nor an independent basis for a tort claim. The decision was affirmed on appeal.
The surety argued that the restatement of torts allowed an action against a defendant who supplies information to plaintiff for use in business transactions with others. The CM pointed out that the provision only applied to administrative, management and related services, which the CM did not provide. Also, the CM?s contract with the owner specified that there was no contract between CM and a third party dealing with the owner. The architect made the same arguments as the CM. The court further noted that the construction of the project, rather than the provision of information, was the purpose for which the architect and the CM were hired. The information was ?incidentally supplied ? as part of the project.?
In addition, the court noted that the owner was obligated under contract to pay the payment applications. The owner had acted in good faith and the surety had to pay even if the contract terms relating to payments had not been followed.
This site and any information contained herein is intended for informational purposes only and should not be construed as legal advice. Seek a competent attorney for advice on any legal matter.
Full post as published by The South Carolina Construction Law Blog on March 10, 2009 (boomark / email).
Morgan Drexen Faces Potential Federal Class Action
Morgan Drexan FAces Potential Class Action
AT&T, Apple Face Potential Class Action over iPhone MMS
AT&T, Apple Face Potential Class Action over iPhone MMS
Wells Fargo Faces Potential Class Action Over Home Equity Credit Lines
Wells Fargo Faces Potential Class Action over Home Equity Credit Lines
Dog Bites
alleging liability for personal injuries caused.
Abacavir
Potential Increase Risk for Cardiac Events
Match.com
Faces Potential Class Action

Potential Personal Liability for Directors: Selling the Company
Philippines: Is each newborn child an asset or liability
Court of Appeals extends potential liability for residential developers
Settlement Planners Beware! Your Inaction May Result in Liability Exposure If Things Go Pear Shaped
Report on the Unauthorized Movement of Nuclear Weapons








