Opinion ID: 1096663
Heading Depth: 2
Heading Rank: 3

Heading: whether a statutory penalty should have been imposed against smith.

Text: ¶ 19. The chancellor also imposed Miss.Code Ann. § 31-5-27's penalty against Smith. This statute contemplates payment by contractors to suppliers and subcontractors while work is ongoing. When the contractor receives payment, the contractor shall pay each subcontractor and material supplier in proportion to the percentage of work completed by each subcontractor and material supplier. Miss.Code Ann. § 31-5-27 (Rev.2000). When Smith breached the contract, the contract was terminated, and the Cobbs were no longer entitled to the benefits under the contract. See, e.g., Restatement (Second) Contracts § 253 (a material breach by either party terminates a contract); see also Estate of Reaves v. Owen, 744 So.2d 799, 802 (Miss.Ct.App.1999). Therefore, after the breach, the Cobbs were no longer material suppliers under the public construction contract, and § 31-5-27 no longer applied to them. Their only recourse at that time was to file a breach of contract suit against Smith. ¶ 20. Thus, the chancellor's imposition of the statutory penalty against Smith was erroneous.