Stewart v. Newbury

Brief Fact Summary. The Plaintiff agreed to do construction work for the Defendant’s new foundry.  The contract did not specify the time of payment.  This dispute arose after the Plaintiff submitted a bill to the Defendant, which he refused to pay.

Synopsis of Rule of Law. If no agreement is made as to the time of payment, the work must be substantially performed before payment can be demanded.

Facts. The Plaintiff and the Defendant contracted for the Plaintiff to do work on the Defendant’s new foundry building.  Nothing was put into writing regarding the time and manner of payment.  The Plaintiff claims, however, that the parties spoke on the telephone regarding payments.  The Defendant denies this.  The Plaintiff commenced work and when he had completed the first floor, he sent a bill for the work done to date.  The Defendant refused to pay and the Plaintiff ceased working on the project.

Issue. Did the Defendant properly refuse to pay the Plaintiff’s bill before the Plaintiff substantially performed on the contract?

Held. Yes.  If no agreement is made as to the time of payment, the work must be substantially performed before payment can be demanded.  Here, the contract did not specify payment terms.  The Plaintiff sent the first bill for his services after he had finished the first floor.  Certainly, this cannot be considered substantial performance on the contract for the construction of a foundry.  Therefore, the Plaintiff was entitled to no payment at that time.

Discussion. If the agreement is silent as to time of payment, the work must be substantially performed before one can demand payment.