Remember this: complying with contractual conditions precedent to payment is important. There is a reason why construction contracts include contractual conditions precedent to payment. The contract does not include this language for sh*ts and giggles. This language is included to establish what is required of the payee before payment becomes due. There may be conditions precedent to the payment of progress payments. There may be conditions precedent to the payment of final payment. Payment is not due until the conditions precedent have been satisfied. Do yourself a favor and consider this language in the construction contract, particularly if a dispute arises. If the condition precedent has not or cannot be satisfied, game plan as to the factual reason. The best thing to do is be prepared – check the boxes regarding conditions precedent to ensure you have considered this contractual language.

In a recent case, Age of Empire, Inc. v. Ocean Two Condominium Association, Inc., 2023 WL 4917089 (Fla. 3d DCA 2023), a contractor entered into a restoration contract with a condominium association. The contract provided that final payment was not due until the contractor furnished a final contractor’s payment affidavit (in accordance with Florida Statute s. 713.06). The contractor filed a lawsuit for final payment. However, the contractor did NOT furnish its final contractor’s payment affidavit prior to filing the lawsuit. Thereafter, the contractor filed an amended complaint attaching a final contractor’s payment affidavit that it served AFTER if filed the original lawsuit. The association moved to dismiss arguing that the final contractor’s payment affidavit, and date therein, demonstrated the contractor failed to satisfy a contractual condition precedent prior to filing the original lawsuit. The trial court agreed and dismissed the lawsuit before it with prejudice, but it did not dismiss with prejudice the contractor’s claim. In other words, the contractor could file a NEW lawsuit that relied on the final contractor’s payment affidavit, provided the contractor’s statute of limitations had not expired. Although the contractor appealed, the appellate court affirmed the trial court’s ruling:

Here, the exhibits [final contractor’s payment affidavit] unequivocally established that [the contractor] did not deliver the final contractor’s affidavit to the Association prior to filing suit, a condition precedent to a breach of contract claim for failure to tender final payment under the Construction Agreement. As such, we find the trial court properly dismissed the claim before it and noted that a future claim would not be barred, as dismissal with prejudice was only as to the lawsuit before it but not the actual claim. The dismissal with prejudice of a prematurely filed claim does not bar a subsequent claim once the claim has ripened.

Age of Empire, supra, at *1 (internal quotation and citation omitted).

Please contact David Adelstein at dadelstein@gmail.com or (954) 361-4720 if you have questions or would like more information regarding this article. You can follow David Adelstein on Twitter @DavidAdelstein1.