1. Subcontract agreement Washington D.C. – Contract Structure and Initial Payment Obligations
In this case, the subcontractor(defendant) accepted substantial pre-payments intended for site labor and material procurement, triggering the obligation to properly account for actual construction progress.
The written agreement stated that materials, meals, and all on-site expenses would be paid by the subcontractor, except where the general contractor(client) prepaid certain items, in which case the amounts would be deducted during final settlement.
These terms created two enforceable duties:
1. Accurate reporting of costs by the subcontractor.
2. Return of excess pre-payments after final calculation of construction progress.
Under Washington D.C. contract principles, such duties are actionable when a party fails to perform and causes financial loss.
Overpayment Determination and Project Interruption
The subcontractor worked on-site for roughly six months before leaving the project due to an unexpected medical situation.
After departure, the client’s CEO managed labor, controlled progress, and paid workers directly.
Once the project reached a measurable completion point, the client determined that construction progress totaled approximately USD 700,000, and—after deducting office-operation expenses recognized in the subcontract agreement—the valid payable amount to the subcontractor was USD 680,000.
Because the subcontractor had already received more than USD 800,000, an overpayment of USD 120,000 was established.
2. Subcontract agreement Washington D.C. – Disputed Performance and Failure to Return Funds
A central dispute arose when the subcontractor asserted that he continued supervising construction even after his medical leave and therefore should receive full compensation without refunding excess payments.
The subcontractor claimed ongoing responsibility for labor oversight and argued that the general contractor’s direct wage payments were unauthorized.
Our litigation team rebutted this assertion with clear evidence:
Validity of Direct Labor Payments Under the Contract
The subcontractor further argued that the general contractor had no right to pay workers directly without his consent.
However, the subcontract agreement expressly stated that “labor wages shall be directly paid by the general contractor as a matter of principle,” a clause drafted to prevent payroll disruption and ensure worker protection under D.C. employment standards.
Thus, direct wage payments were not only contractually permitted but also legally expected during supervisory interruption.
3. Subcontract agreement Washington D.C. – Legal Strategy for Recovery of Excess Funds
Because the subcontractor withheld repayment for more than a year, our firm pursued recovery using multiple legal theories recognized under D.C. law: breach of contract, unjust enrichment, and recovery of money had and received.
To prove breach, we demonstrated the subcontractor’s failure to:
Assertion of Unjust Enrichment and Supporting Evidence
Even if the subcontractor attempted to dispute the strict contractual reading, unjust enrichment principles applied.
We showed that:
- The client conferred a financial benefit (pre-payment).
- The subcontractor retained that benefit despite non-performance.
- Retention without repayment would be inequitable.
4. Subcontract agreement Washington D.C. – Outcome and Key Takeaways
The litigation concluded with a favorable order requiring the subcontractor to return the full USD 120,000 overpayment along with delay-based compensation for the extended non-payment period.
This case highlights the importance of:
In Washington D.C., courts closely examine documentation and enforce the plain language of a subcontract agreement, making thorough record-keeping essential.
Should a subcontract agreement dispute occur, please reach out to our law firm immediately.
27 Nov, 2025
