## Facts

- A general contractor contracted with New York State to build a bridge by December 31, 1969.
- The contractor subcontracted with a steel company to furnish and erect structural steel, expressly providing that time was of the essence and requiring completion of the steel work in 1968.
- The steel company encountered fabrication and related difficulties, fell behind schedule, and did not complete its work within 1968; the contractor knew of the causes of delay.
- Despite the missed deadline, the contractor allowed the subcontract relationship to continue into 1969 while seeking scheduling information.
- In January and February 1969, the contractor demanded a delivery and erection schedule and warned it might obtain an alternative supplier and charge the steel company with resulting added costs.
- The steel company did not provide a firm schedule, but stated it would proceed with all possible speed and continued preparatory work.
- After a March 1, 1969 plant visit, the contractor became dissatisfied with progress and cancelled the subcontract on March 5, 1969, then hired another steel company.
- The steel company sued to recover for work performed, alleging wrongful termination; the contractor counterclaimed for delay-related damages.

## Issues

1. Whether the contractor waived the subcontract’s “time is of the essence” provision by permitting continued performance after the 1968 deadline with knowledge of delay.
2. If waiver occurred, whether the steel company’s duty became performance within a reasonable time and whether the contractor could cancel based on the original deadline.
3. Whether waiver of strict timely performance eliminates, or preserves, the contractor’s right to seek damages for delay.

## Decision

- The Appellate Division modified the trial court’s judgment, rejecting analysis that treated the dispute as governed solely by UCC Article 2 and emphasizing general contract principles applicable to a furnish-and-erect subcontract.
- The court held the contractor’s conduct waived strict enforcement of the original time-is-of-the-essence deadline by continuing the contractual relationship after the deadline and seeking schedules rather than promptly terminating.
- After waiver, the steel company was required to perform within a reasonable time, and the propriety of the contractor’s cancellation had to be assessed under that standard rather than the expired 1968 date.
- The New York Court of Appeals affirmed, stating that once the time-is-of-the-essence provision was waived, performance within a reasonable time was all that was required; waiver barred cancellation based on the original deadline but did not foreclose delay damages.

## Legal Principles

- A party may waive a time-is-of-the-essence condition by knowingly allowing late performance to continue while treating the contract as ongoing.
- Once a time-is-of-the-essence provision is waived, the obligor’s duty is to perform within a reasonable time under the circumstances.
- Waiver of the right to cancel for untimely performance does not eliminate the nonbreaching party’s claim for damages caused by delay.
- Contracts requiring both furnishing and erection of construction materials are evaluated under general contract principles for performance and remedies rather than by a purely goods-based framework.

## Conclusion

The courts held that the general contractor waived strict enforcement of a time-is-of-the-essence deadline by allowing continued performance after the missed date; after waiver, the subcontractor owed performance within a reasonable time, and the contractor’s remedies shifted from cancellation based on the original deadline to damages for any proven delay.


Schenectady Steel Co. v. Bruno Trimpoli Gen. Constr. Co., 350 N.Y.S.2d 920 (App. Div. 3d Dep’t 1974)