On August 11, 2010, the Federal District Court of the Southern District of New York decided a case in which it determined whether a contractor owed a duty of care to the subcontractors who did not sign an agreement directly with the contractor.

The Court in Travelers Casualty and Surety Company v. Dormitory Authority-State of New York et al., –F.Supp.2d–, 2010 WL 3199861 (S.D.N.Y.) held that the sub-contractor, Travelers Casualty and Surety Company, could not recover because the law does not permit a stranger to a contract to sue a contracting party for negligent contract performance.  In reaching its decision, the Court stated:

“Travelers cannot show that defendants intended that Trataros be a third-party beneficiary of their agreement.  The passages cited by Travelers from the Kohn Pederson Fox (“KPF”)-Dormitory Authority State of New York (“DASNY”) Contracts and the TDX Construction Corp.-DASNY Contracts in opposing KPF’s and TDX’s motions only amount to contract language referring to third parties as necessary to assist those parties in their performance.  The ordinary construction contract … does not give third parties who contract with the promisee the right to enforce the latter’s contract with another.  As such, to the extent Travelers purports to state a claim for breach of contract against KPF and TDX, those claims are dismissed.”

Id. at 6, 14.

The Court granted defendants’ motions for summary judgment to dismiss plaintiff’s complaint.

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