Legal Question in Construction Law in California

A hires B to do work for C. C has a problem with B's work. B will fix it if C releases B from additional obligation. C says since contract was between A & B, then A has to release B. Is C right?

A condominium HOA hires a contractor to repair a unit in the bldg.

Signatories are the contractor and property manager (agent for the HOA).

A dispute over completed work arises between contractor and condo owner.

Contractor offers to resolve dispute contingent upon owner releasing contractor from further liability or obligation if add'l work addressing dispute is completed.

Owner refuses to sign, claiming they are not a party to the original contract under dispute.

Is the owner correct in this claim? Or is the release a new agreement between owner and contractor, superseding the prior contract?


Asked on 5/02/12, 3:24 pm

1 Answer from Attorneys

This is not quite a simple yes or no question. The homeowner is a third-party beneficiary of the contract, but is not a party to it. Therefore the homeowner can release the homeowner's right to benefits from the contract, but cannot release the entire contract. Nothing between the homeowner and contractor can be binding on the HOA, except to the extent that the homeowner releasing the beneficial interest in the contract may absolve the HOA of responsibility to the homeowner to require anything further from the contractor.

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Answered on 5/07/12, 3:28 pm


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