ContractsProf Blog

Editor: Myanna Dellinger
University of South Dakota School of Law

Thursday, December 31, 2009

Contract Dispute in My Local Paper

 I knew my subscription to the local paper would pay off at some point.  Today's edition of the Post Tribune includes an account of what looks like an interesting contracts dispute.  There are some ambiguities in the report, but making a few reasonable inferences, I think the facts are as follows:

Lake County contracted with Amereco Engineering, Inc. in 1998.  The contract was renewed in 2001 and 2004.  In 2006, Lake County cancelled the contract on the ground that the projects to which the contract related had not been funded.  In the report, Lake County's attorney claims that a contract for which there are no appropriations is void.  I suspect that what is really intended is that the contract was subject to a condition precedent which did not occur, excusing Lake County from performing any further contractual obligations.

Fair enough, but Amereco contends that Lake County is making use of some of Amereco's designs on projects that have been funded.  Amereco claims that it is entitled to $68,425 for that design work.  Amereco further contends that the projects to which its contract related were funded but that after a change in the composition of the County Council, the County simply hired a different engineering firm to proceed with the work.  Amereco thus contends that it is also entitled to the full value of the contract, which it puts at $1 million.  

Factual development in this case should be interesting.

[Jeremy Telman]

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