26.4 Interpretation of Subcontracts

• Library: Virginia Construction Law Deskbook (Virginia CLE) (2019 Ed.)

26.4 INTERPRETATION OF SUBCONTRACTS

26.401 Express Obligations Will Be Enforced Unless Contrary to Law or Public Policy. Under Virginia law, the courts will enforce clear and unambiguous contract terms as written unless contrary to some rule of law or public policy. ¹⁷⁶ "The court will not write a new contract for the parties even when, in light of the facts known to them, the court might think they should have adopted different language." ¹⁷⁷ In that regard, the Virginia Supreme Court has written:

Familiar principles of contract interpretation are pertinent to our resolution of this appeal. We must enforce the contract between McClain and the County as written, and the contract becomes the law of the case unless the contract is repugnant to some rule of law or public policy. It is

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well-established that when a contract is clear and unambiguous, it is the duty of the Court, and not the jury, to decide the meaning of the contract. Words that the parties used are normally given their usual, ordinary, and popular meaning. No word or clause in the contract will be treated as meaningless if a reasonable meaning can be given to it, and there is a presumption that the parties have not used words needlessly. ¹⁷⁸

In Winn v. Aleda Construction Co., ¹⁷⁹ the Virginia Supreme Court wrote, "[w]hen a contract provides for the performance of special conditions precedent before a party is entitled to payment, the conditions must be performed unless the other party prevents or waives their performance." ¹⁸⁰

Courts in Virginia will not relieve a party of the plain obligations of its contract simply because that party may have made a bad bargain, unless there is proof of fraud or misrepresentation of a material fact. ¹⁸¹

In Tidewater Skanska, Inc. v. Plateau Elec. Constructors, Inc., ¹⁸² the electrical subcontract incorporated by reference the general contract between the general contractor and the Navy to replace several piers at the Norfolk Naval Station. The general contract called for the work to be performed in accordance with the contract drawings, specifications and amendments, and all other data referenced therein and which by reference were made a part of the general contract. The electrical subcontractor contended that it had not seen the specifications. The federal district court rejected this defense, writing;

Even in viewing the record as a whole in the light most favorable to Defendants, the Court can not go against the express terms of the contract. Although, Lankins says that he never saw the specifications, it is clear that he knew that the specifications existed because Plateau signed the subcontracts which reference those specifications. It is not

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enough for Lankins to simply say that he never saw those specifications when they were clearly incorporated by reference into the contract. ¹⁸³

The court ruled that the subcontractor had breached its contract by making modifications in the work contrary to the express terms of the subcontract. ¹⁸⁴

In Worley Bros. Co. v. Marus Marble & Tile Co., ¹⁸⁵ the Virginia Supreme Court, with approval, wrote:

A contractor who bids for work has the right to rely on the plans and specifications submitted to him for bidding purposes. The rights of the parties are to be measured by them. It is only through the plans and specifications that he can make an intelligent bid. Burdens other than those contemplated by the contract may not be placed upon the contractor without additional compensation. ¹⁸⁶

In W.F. Magann Corp. v. Virginia-Carolina Elec. Works, Inc., ¹⁸⁷ the subcontract included a clause indemnifying the general contractor for all loss, damage, or expense caused by any person having anything whatsoever to do with the work of the subcontractor. A third-party utility company performed work that connected into and was necessary to the subcontractor's work. The utility company's work resulted in flooding and damage to electric motors, pumps, and equipment. The court found the subcontract's indemnity clause to cover the loss, writing:

By the plain words of its contract, Virginia-Carolina made itself responsible for all loss, damage or expense occasioned by any act of persons described, or any other person having "anything whatsoever to do in connection with the work" of Virginia-Carolina. Very clearly VEPCO had something to do in connection with the work of Virginia-Carolina. . . . Its connection with the work of Virginia-Carolina was closer

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than would have been the connection of a materialman who delivered material to the job and for whose act by express designation Virginia-Carolina contracted to be responsible. ¹⁸⁸

The predilection of Virginia courts to enforce the express terms of a subcontract is also apparent in J.W. Creech, Inc. v. Norfolk Air Conditioning Corp. ¹⁸⁹ Norfolk Air was a subcontractor in the construction of a building at Old Dominion University. Norfolk Air installed an evaporative condenser on the roof of the new building. Water in the condenser coil froze, resulting in leaks. Norfolk Air repaired the coil and billed the general contractor for the work as an extra. The project architect refused to accept the repaired unit or the costs to repair the unit and directed installation of a new unit. The court emphasized the express terms of the contract in rejecting the subcontractor's claim for the repair costs:

Further, under the terms of its contract, Norfolk Air was expressly made responsible for "work and equipment until finally inspected, tested, and accepted"; it was also required to "protect work against theft...