Sub Lulled into Believing Contractor Would Pay

Originally posted on July 22, 2011 by Ryan

Cleveland Construction, Inc. v. Ellis-Don Construction, Inc., 2011 N.C. App. LEXIS 641 (April 5, 2011).

The statute of limitations tolled on a subcontractor awaiting payment from a general contractor. Usually this would bar the sub’s claims, however, the court in this case held that the GC made promises to the sub that payment was forthcoming from the owner. The GC also encouraged the sub to hold off on filing suit so the two could assert a united front against the owner. The court held that under these circumstances, it was reasonable for the sub to rely on the GC’s promises of payment and the statute of limitations should not bar the sub’s recovery.

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