CACI 4502 Breach of Implied Covenant to Provide Necessary Items Within Owner’s Control—Essential Factual Elements

California Civil Jury Instructions CACI

4502 Breach of Implied Covenant to Provide Necessary Items Within Owner’s Control—Essential Factual Elements

In every construction contract, it is understood that the owner will provide access to the project site and do those things within the owner’s control that are necessary for the contractor to reasonably and timely perform its work. [Name of plaintiff] claims that [name of defendant] breached the contract by [specify what owner failed to do, e.g., failing to procure a disposal permit for hazardous materials]. To establish this claim, [name of plaintiff] must prove all of the following:

1.That [name of plaintiff] could not reasonably or timely perform [his/her/nonbinary pronoun/its] work without [insert short name for item, e.g., a disposal permit];

2.That [name of defendant] knew or reasonably should have known that [e.g., a disposal permit] was necessary for [name of plaintiff] to reasonably and timely perform the work;

3.That [name of defendant] had the ability to [e.g., procure a disposal permit];

4.That [name of plaintiff] could not [e.g., obtain a disposal permit] without [name of defendant]’s assistance;

5.That [name of defendant] failed to [e.g., procure a disposal permit] in a timely manner; and

6.That [name of plaintiff] was harmed by [name of defendant]’s failure.

Directions for Use

This instruction should be used when a contractor claims the owner breached an implied covenant to provide necessary access to the project site, easements, permits, or other things uniquely within the owner’s control in order for the contractor to reasonably and timely perform the contract. Also give CACI No. 303, Breach of Contract—Essential Factual Elements, for other contested elements of a breach-of-contract claim.

This implied covenant can arise in both private and public contracts unless it is expressly precluded by the contract documents. (See Hensler v. City of Los Angeles (1954) 124 Cal.App.2d 71, 82 [268 P.2d 12] [covenant is implied in every construction contract]; see also Bomberger v. McKelvey (1950) 35 Cal.2d 607, 613 [220 P.2d 729] [covenant implied in private contract].) This instruction may also be used when the contractor claims the owner breached a general duty of cooperation by failing to control and/or coordinate third parties, such as other contractors on the project site.

This instruction is based on CACI 325, Breach of Covenant of Good Faith and Fair Dealing—Essential Factual Elements.

Sources and Authority

Implied Stipulations to Make Contract Reasonable. Civil Code section 1655.

Implied Contract Terms. Civil Code section 1656.

“In every building contract which contains no express covenants on the subjects there are implied covenants to the effect that the contractor shall be permitted to proceed with the construction of the building in accordance with the other terms of the contract without interference by the owner and that he shall be given such possession of the premises as will enable him to adequately carry on the construction and complete the work agreed upon. Such terms are necessarily implied from the very nature of the contract and a failure to observe them not consented to by the contractor constitutes a breach of contract on the part of the owner entitling the contractor to rescind, although it may not amount to a technical prevention of performance.” (Gray v. Bekins (1921) 186 Cal. 389, 395 [199 P. 767], internal citations omitted.)

“Under the contract as thus construed, there was an implied covenant that plaintiffs would be given possession of the premises for the agreed purpose at a reasonable time to be chosen by them. Defendant’s conduct in forbidding plaintiffs to enter, therefore, was sufficient not only to excuse their performance but also to constitute a breach or anticipatory breach of the contract.” (Bomberger, supra, 35 Cal.2d at p. 613, internal citations omitted.)

“The rule is plain that in every construction contract the law implies a covenant, where necessary, that the owner will furnish the selected site of operations to the contractor in order to enable him ‘to adequately carry on the construction and complete the work agreed upon.’ The rule applies with equal force to construction contracts entered into by a municipality.” (Henslersupra, 124 Cal.App.2d at p. 83, internal citations omitted.)

“In general, where plans, specifications and conditions of contract do not otherwise provide, there is an implied covenant that the owner of the project is required to furnish whatever easements, permits or other documentation are reasonably required for the construction to proceed in an orderly manner.” (COAC, Inc. v. Kennedy Engineers (1977) 67 Cal.App.3d 916, 920 [136 Cal.Rptr. 890].)

“The rule is well settled that in every construction contract the law implies a covenant that the owner will provide the contractor timely access to the project site to facilitate performance of work. When necessary permits relating to the project are not available or access to the site is limited by the owner, the implied covenant is breached. The trial court found the delays were caused by the [defendant]’s breaches of contract and implied covenant in failing to disclose known restrictions on project performance, to obtain necessary permits, and to provide timely access to perform the work.” (Howard Contracting, Inc. v. G.A. MacDonald Construction Co. (1998) 71 Cal.App.4th 38, 50 [83 Cal.Rptr.2d 590], internal citations omitted.)

“[A] contract includes not only the terms that have been expressly stated but those implied provisions indispensable to effectuate the intention of the parties. … [¶] Clearly an implied term of the contract herein was that once the notice to proceed was issued, the dredge would be available for work on the project … . [¶] [Plaintiff], acting as a reasonable public works contractor, was misled by this incorrect implied representation in its submission of a bid. [Plaintiff] justifiably relied on this representation in determining the cost of constructing the seawall. Accordingly, it did not include in its bid the cost of maintaining the seawall for an indefinite period of time while awaiting the arrival of the dredge. As the [defendant] impliedly warranted the correctness of these representations, it is liable for the cost of extra work which was necessitated by the dredge’s failure to arrive.” (Tonkin Constr. Co. v. County of Humboldt (1987) 188 Cal.App.3d 828, 832 [233 Cal.Rptr. 587], internal citations omitted.)

“ ‘[T]he covenant is implied as a supplement to the express contractual covenants, to prevent a contracting party from engaging in conduct which (while not technically transgressing the express covenants) frustrates the other party’s rights to the benefits of the contract.’ ” (Racine & Laramie, Ltd. v. Department of Parks & Recreation (1992) 11 Cal.App.4th 1026, 1031–1032 [14 Cal.Rptr.2d 335], original italics.)

Secondary Sources

1 Witkin, Summary of California Law (11th ed. 2017) Contracts, § 827
1 California Construction Contracts, Defects, and Litigation (Cont.Ed.Bar) Ch. 6, Public Contracts: Disputes and Remedies, § 6.84, 6.85
5 Stein, Construction Law, Ch. 18, Warranties, ¶ 18.02 (Matthew Bender)
12 California Real Estate Law and Practice, Ch. 140, Contracts, § 140.45 (Matthew Bender)
10 California Forms of Pleading and Practice, Ch. 104, Building Contracts, § 104.24 (Matthew Bender)
5 California Points and Authorities, Ch. 50, Contracts, § 50.242 (Matthew Bender)
Acret, California Construction Law Manual (6th ed.) §§ 1:80, 1:82 (Thomson Reuters)
Acret, California Construction Law Manual (6th ed.) §§ 7:48, 7:77 (Thomson Reuters)
Bruner & O’Connor on Construction Law, § 9:99 (Thomson Reuters)
Kamine, Public Works Construction Manual (BNI Publications, Inc. 1996) p. 10