Question:
K&G Construction Co. was the owner of and the general contractor for a housing subdivision project. Harris contracted with the company to do excavating and earth-moving work on the project. Certain provisions of the contract stated that (1) K&G was to make monthly progress payments to Harris; (2) No such payments were to be made until Harris obtained liability insurance; and (3) All of Harris’s work on the project must be performed in a workmanlike manner. On August 9, a bulldozer operator, working for Harris, drove too close to one of K&G’s houses, causing the collapse of a wall and other damage. When Harris and his insurance carrier denied liability and refused to pay for the damage, K&G refused to make the August monthly progress payment. Harris, nonetheless, continued to work on the project until mid-September, when the excavator ceased its operations due to K&G’s refusal to make the progress payment. K&G had another excavator finish the job at an added cost of $1,450. It then sued Harris for the bulldozer damage, alleging negligence, and also for the $1,450 damages for breach of contract. Harris claims that K&G defaulted first, having no legal right to refuse the August progress payment. Did K&G default first? Explain.