Brown Bros. Elec. Contrs. v. Beam Constr. Corp – Case Brief Summary (New York)

In Brown Bros. Elec. Contrs. v. Beam Constr. Corp., 41 N.Y.2d 397, 401, 361 N.E.2d 999, 393 N.Y.S.2d 350 (1977), an owner agreed to directly pay a subcontractor for its performance of electrical work, even though the general contractor was obligated to pay the subcontractor pursuant to the subcontract. Id.

It was uncertain whether the general contractor would continue working on the project and paying the subcontractor, and the general contractor in fact later departed the project. Id.

The Court of Appeals held that the agreement between the owner and subcontractor was enforceable, despite the existence of the subcontract obligating the general contractor to pay the subcontractor. Id.

The Court found that, because of the uncertainty regarding whether the general contractor would continue its work, the subcontractor's continued performance of its work was valid, new consideration. Id.

Thus, the agreement of the owner to pay the subcontractor served both parties' interests, by giving the owner "greater assurance" that the subcontractor would continue its work and making the subcontractor "more certain of receiving payment." Id.