Church construction cases take special expertise to prevent against paying for construction materials twice.

Nonprofit and Church Legal Trends - Free Edition - January February 2009 (free edition)

Assume a church enters into a contract with a roofing company for the installation of a new roof. The church pays the contract price of $500,000. After the project is complete, the church receives a letter from the company that provided the roofing materials to the contractor, demanding payment in the amount of $100,000 for materials it provided. Church leaders later discover that the contractor never paid for the roofing materials. Are they correct to believe, that the church cannot be forced to "pay twice" for the same material? The answer may surprise you...

Consider this example. A church enters into a contract with a contractor for the purpose of constructing a building addition at a total cost of $152,500, including all labor and materials, and the church pays the contractor the full contract price. Can the concrete supplier collect against the church for $26,500 worth of concrete when the contractor fails to pay them?

In just such a case, a jury ordered the church to pay the concrete supplier for the concrete, acknowledging that the church could sue the contractor if he ever was found. An appeals court observed that under North Carolina law the church's full payment of the contract price to the contractor extinguished the concrete supplier's right to a "materialman's lien" in the church's property, but that the church had failed to raise this defense at either the trial court or on appeal. However, the supplier is not entitled to an amount additional to the cost of the materials, whether incurred for finance charges or attorney fees, unless the contract between the parties specifically provides for it.