Commercial Division Blog

Posted: June 30, 2023 / Written by: Jeffrey M. Eilender, Samuel L. Butt, Seth D. Allen, Joshua Wurtzel, / Categories Contract Interpretation, Contracts

Strict, Rather than Substantial, Compliance With Notice-of-Claim Procedures in Public-Works Contract Required

On May 31, 2023, Justice Melissa Crane issued a decision in WDF, Inc. v. Dormitory Authority of the State of New York, 2023 NY Slip Op 31870(U), holding that a contractor's strict, rather than substantial, compliance with conditions precedent to payment for extra work in a public-works contract was required, explaining:

Because the notice of claim procedures applied, the core question that the court must evaluate is whether evidence of actual notice of extra work is sufficient to defeat summary judgment, even if Defendant establishes that Plaintiff did not strictly and literally comply with its notice of claim obligations.

In general, a contractual notice provision, such as the ones here, constitutes a condition precedent (see A.H.A. Gen. Constr. v New York City Hous. Auth., 92 NY2d 20, 30- 31, 699 N.E.2d 368, 677 N.Y.S.2d 9 [1998]; Fahs Rolston Paving Corp. v County of Chemung, 43 AD3d 1192, 1194, 841 N.Y.S.2d 404 [3d Dept 2007]; TADCO. Constr. Corp. v Dormitory Auth. of the State of NY, 139 AD3d 471, 472, 29 N.Y.S.3d 798 [1st Dept 2016] [affirming summary judgment dismissal where motion court "correctly determined that plaintiff failed to comply with [*17] any of the conditions precedent to recovering its claims for additional compensation for change orders and extra work"]).

Failure to "strictly comply" with these provisions "generally constitutes waiver of a claim for additional compensation" (Fahs Rolston, 43 AD3d at 1194; F. Garofalo Elec. Co. v New York Univ., 270 AD2d 76, 80, 705 N.Y.S.2d 327 [1st Dept 2000] ["The contract's notice and documentation requirements for extra work and delay damages are conditions precedent to plaintiffs recovery and the failure to strictly comply is deemed a waiver of such claims."]; see also Mezzacappa Bros., Inc. v City of New York, 29 AD3d 494, 495, 815 N.Y.S.2d 549 [1st Dept 2006] ["Where the parties to a contract have made an event a condition of their agreement, there must be strict compliance."]).

Generally, express conditions precedent must be "literally performed" and "substantial performance" is not sufficient to excuse a plaintiff's failure to do so (see NASDI LLC v Skanska Koch Inc. Kiewit Infrastructure Co. (JV, 2020 U.S. Dist. LEXIS 178407, 2020 WL 5768319, **12-13 [SDNY Sept 28, 2020]; Tak Chio Cheong v Jinghong Zhu, 138 AD3d 433, 433, 28 N.Y.S.3d 67 [1st Dept 2016]).

The court also notes that there are particularly strong public policy considerations against excusing noncompliance with notice requirements in public works contracts. The Court of Appeals explained the importance of such notice provisions in AHA Gen Constr. v New York City Hous. Auth., 92 NY2d 20, 33- 34, 699 N.E.2d 368, 677 N.Y.S.2d 9 [1998]: "These provisions, common in public works projects, provide public agencies with timely notice of deviations from budgeted expenditures or of any supposed malfeasance, and allow them to take early steps [*18] to avoid extra or unnecessary expense, make any necessary adjustments, mitigate damages and avoid the waste of public funds. Such provisions are important both to the public fisc and to the integrity of the bidding process."

[**10] To put it plainly, when a contractor is working with taxpayer funds, the courts should strictly enforce contractual provisions to protect those funds (see id.; see also Bat-Jac Contracting, Inc. v New York City Housing Authority, 1 AD3d 128, 129, 766 N.Y.S.2d 352 [1st Dept 2003] [granting defendant's motion for summary judgment, finding that "[p]laintiff failed to file a timely notice of claim, which is expressly made a prerequisite to recovery under the parties' contract and which is subject to strict construction as a matter of public policy"]).

Here, the court grants summary judgment dismissing the cause of action for recovery of the value of extra work because DASNY presented undisputed evidence showing that WDF did not comply with conditions
precedent within the notice of claim procedures.

As this case shows, strict compliance with a notice provision that is deemed to be a condition precedent is required, and substantial compliance--even if actual notice is given--is insufficient. Contact the Commercial Division Blog Committee at if you or a client have questions concerning conditions precedent.