In Storms, Inc. v. Mathy Construction Company, the Minnesota Supreme Court held that a general contractor could force a subcontractor to accept a contractor’s reduced change orders on miscalculated estimated quantities—without breaching the subcontract. The Minnesota Supreme Court’s holding also yielded an equitable outcome because the general contractor was not required to unjustly compensate the subcontractor.
The Minnesota Supreme Court’s unanimous decision in Storms likely leaves Minnesota Department of Transportation subcontractors concerned. The precedent set by this decision allows general contractors to pass contract price reductions to their subcontractors. However, there is minimal reason for concern because the Minnesota Supreme Court’s holding in Storms is narrow. Further, subcontractors can easily avoid hardship because the holding informs subcontractors of this worrisome possibility.
This Note begins with a historical introduction to relevant contract interpretation principles and related construction contract terminology. The Note then presents a chronological overview of the dispute and subsequent litigation. Last, the Note argues that the Minnesota Supreme Court’s holding was just, the potential future impact of the holding is minimal, and the Minnesota Department of Transportation’s Standard Specifications for Construction needs further revision.