Public Building Authority of the City of Huntsville v. St. Paul Fire and Marine Insurance Company; Public Building…

Summary

The court held that the Public Building Authority's termination of the construction contract for convenience was final and could not later be converted into a termination for cause absent contractual language authorizing conversion. Because the Authority terminated the contract before attempting to satisfy the performance bond's conditions precedent, the surety was entitled to summary judgment. The court also held that the contract provision governing interim payments did not survive termination for convenience and that the economic-loss rule did not categorically bar tort claims in a commercial-construction dispute. Justice Murdock, dissenting, would have construed the contract to preserve the contractor's existing obligations and would have applied the economic-loss rule to the subcontractors' claims.