Pay-when-paid Clause Excuses Prime from Paying Subcontractor Since Owner Didn’t Pay
ConstructionRisk.com Report Vol. #13, Issue #4
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pay-when-paid,Payment Issues
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Where a pay-when-paid clause in a construction subcontract unambiguously states that the subcontractor will only be paid for its work after the prime contractor has been paid by the project owner, the clause was ambiguous due to incorporation of the AIA form prime contract which provided the owner would reimburse contractor for payments made by [...]
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Contractor Forfeited Right to Payment by Performing Work without a License
Contractor license,Licenses,Payment Issues
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Where a contractor executed a contract before having its license and then obtained the license shortly after performance began, the contractor forfeited all right to payment for either the work performed before licensure or the work performed after licensure. Under a second contract with the same contractor for different work on the project, the contractor [...]
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De Facto Takeover: Are a Surety’s Rights Protected?
Federal Government Contracts,Payment Issues,Sureties,Withholding Payment
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By Michael J. Carrato, Esq. A Miller Act surety needs to be aware of certain notice requirements if it decides to take over performance for its principal on a federal construction contract. Informal or “constructive” notice that a surety intends to take over management of a project may not be enough to protect the surety’s [...]
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Do You Really Want to Cash that Check?
Accord and Satisfaction,Partial Payment,Payment Issues,Waiver and Release
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Everyone involved in construction contracts is concerned about payment. Owners generally refuse to pay general contractors until they have secured lien releases; general contractors are hesitant to pay subcontractors until specific blocks of work have been completed; and subcontractors are concerned about getting paid at all. Given these concerns, it is easy to see why [...]
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Accord and Satisfaction Language Barred Contract Claim
Accord and Satisfaction,Final Payment,Payment Issues,Settlement Agreement
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Where a statement was conspicuously contained in a letter transmitting a check for final payment to a contractor stating that the check will constitute full satisfaction of a contractor claim, a court held this to be an accord and satisfaction, barring the contractor from claiming additional monies under its contract. In Gelles & Sons General [...]
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Contractor Suit against Project Owner’s Lender for Failing to Pay for Work Performed on Project is Dismissed
ConstructionRisk.com Report Vol. #12, Issue #12
See article in the following topic indices:
Breach of Contract,Lender,Misrepresentation,Payment Issues
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Where a contractor brought a claim against a project owner’s bank that was funding the project, based on allegations that the bank made promises to the contractor that funds were available and would be paid to the contractor to complete the project, summary judgment was granted in favor of the bank, with the finding no [...]
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