One of the fundamental purposes of a written construction contract, signed by each party, is to refute the allegation of oral side agreements, implied agreements, or other agreements relating to the same scope of work. When properly drafted, a contract should serve as a complete, integrated agreement, superseding any negotiations or discussions relating to the work. A party’s remedy is under the terms of the written contract, not in equity and not under some other alleged agreement.
The Kentucky Supreme Court recently ruled that a subcontractor was limited to recovery for the 10 line items of work stipulated in the written subcontract. The sub alleged it actually performed additional line items of prime contract work. But, the sub was not allowed to recover from the prime contractor under an implied contract or in equity. A concurring opinion said the subcontractor was alleging an illegal agreement that violated subcontracting limitations on small business set-aside projects.
The other case in this issue involved the “look back” period for “repeat” OSHA violations. A federal appeals court ruled that the period stated in an OSHA field manual conferred no substantive rights on contractors. It served only as a guideline for government personnel and was intended to promote uniformity.