A general contractor may now be liable to a supplier and subcontractor even if the supplier and subcontractor fails to perfect its claim against the payment bond on a public project.
Consider the following scenario: a supplier furnishes equipment or materials to a subcontractor for a public project. The subcontractor goes out of business and is replaced by the general contractor. The suppliers equipment is then installed by the replacement subcontractor. The supplier is never paid. The supplier fails to perfect its claim against the general contractors payment bond for the project.
The supplier files a lawsuit against the general contractor contending that it was unjustly enriched because it never paid for the suppliers materials. The general contractor makes the following arguments against the suppliers claim: