Question

Conditions

Xavier Excavations, Inc., was hired by NoName, LLC, to perform excavating and grading work on Terra Firma, a residential construction project in West Knox County, Maryland. City Bank financed the project with a loan to NoName, LLC. As the work progressed, Xavier Excavations, Inc. received payments totaling 90 percent of the price on its contract. NoName then defaulted on the loan from City Bank and the Bank foreclosed and took possession of the property. Xavier Excavations filed a suit in a Maryland state court against the bank to recover the final payment on its contract. The bank responded that Xavier Excavations had not received its payment because it had failed to obtain an engineer’s certificate of final completion, a condition under its contract with NoName. Xavier Excavations responded that it had completed all the work it had contracted to do. What type of contract condition does obtaining the engineer’s certificate represent? Is Xavier Excavations entitled to the final payment? Discuss fully.

Answer 1

As per the given case, Xavier Excavations, Inc. received payment totalling 90% of the price of its contract and the bank foreclosed and took the possession of the property. Though Xavier Excavations responded that it had completed all the work it had c contracted to do.

As per the banking rules, the percentage of completion of work is considered by the bank only after an engineer certificate is attached to the statement of completion of the work. In this case the contention of Xavier Excavations Inc is incorrect. The contract deems complete only after an engineer certifies that the contract is complete.

Without Engineer Certificate Xavier Excavations is not entitles to get the final payment