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A valid oral contract found despite no evidence of a single conversation




By Laura Mallory

Two Contractor and Subcontractor Payment Act
CASPA is a statute that seeks to protect contractors and subcontractors and to encourage fair dealing among parties to a construction contract.  The statute provides rules and deadlines in order to ensure prompt payments. Specifically, CASPA applies to a construction contract, which is defined as an agreement, whether written or oral, to perform work to real property.  The issue was whether the construction of a curb fell within the meaning of a construction contract defined by CASPA. The plain language of CASPA showed that a "curb" can be considered a structure and an alteration of real property.  As a result, the court found that an agreement between the contractor and subcontractor for construction of a curb fell within the ambit of CASPA.
The general contractor also argued that the trial court erred by finding that the subcontractor established the existence of an oral contract because the subcontractor failed to offer testimony of a single conversation and did not provide specific terms and conditions of the alleged oral contract. However, the appeals court was not persuaded.  The appeals court examined the parties’ prior history and explained that an offer may be accepted by conduct, and courts may look to the surrounding circumstances and course of dealings between parties to ascertain their intent.  The evidence demonstrated that the contractor would contact the subcontractor, a purchase order would be issued specifying a project, and the subcontractor would perform the requested service and invoice the contractor once services were rendered.  This same series of events continued for almost a decade without issue before the nonpayment began.  As a result, the court found this conduct was relevant to proving the existence of an oral contract, despite the lack of testimony regarding a conversation forming the oral agreement.♦



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