Stewart v. Newbury
Citation and Court
Stewart v. Newbury, 220 N.Y. 379 (N.Y. 1917)
Facts
Stewart contracted to do concrete work for Newbury. The contract did not specify when payment was due. Stewart demanded progress payments in installments as the work proceeded; Newbury refused, insisting payment was due only after substantial completion. Stewart stopped work when Newbury refused the first progress payment request, and Newbury hired someone else to finish the job.
Issue
When a construction contract is silent on the timing of payment, whether the contractor is entitled to payment in installments as work progresses or only upon substantial completion.
Holding
The New York Court of Appeals held that absent an express agreement for installment payments, payment is not due until the work is substantially completed; Stewart’s stoppage was therefore a breach, not Newbury’s refusal to make progress payments.
Rule / Doctrine
Where a construction contract is silent as to the time of payment, a constructive condition applies: the contractor’s duty to complete the work and the owner’s duty to pay are mutually dependent, and payment is not due until the contractor has substantially performed. An agreement to make progress payments must be express.
Significance
A classic case on constructive conditions and the default rule for payment in construction contracts. Establishes that courts will imply the condition of substantial completion before payment is due, absent explicit contrary provisions. Important for understanding how courts construct implied conditions and the relationship between performance and the duty to pay.