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.
