Eight Years Later, Suspended Contract Bites Contractor

How long can work under a contract be suspended before the contractor’s obligations will be deemed terminated? A lot longer than you might expect.

In Avery Place, LLC v. Highways, Inc., a recent case from the Tennessee Court of Appeals, the Court was asked to consider whether the trial court had erred in granting a motion for summary judgment regarding a breach of contract action where the contractor refused to perform work at the price specified in the contract. The contract had been suspended for eight years.

Key Considerations:

• The work was intended to be done in two phases, with at least a one-year gap between the completion of phase one and the start of phase two.
• According to the contractor, the cost of materials necessary to perform the work had increased by over 300 percent since the contract had been executed, making an $8,800 job into a $38,000 job.