Many in the construction industry fall prey to these payment myths – and encounter collection problems as a result. 1. “Don’t worry about it, we can always lien.” Just filing a lien does not convert an unpaid receivable into cash. There must be equity in a property to collect. 2. “We don’t care about anyone […]
construction contracts Archive
Prompt Pay Act Still Has Teeth
We helped negotiate, draft and pass Ohio’s Prompt Payment Act (R.C. 4113.61) in the early 1990s. It became a model for many other states. The Act provides that once a contractor gets paid for a subcontractor’s (or supplier’s) work, he must pay the subcontractor within ten (10) calendar days after receipt. If he fails to […]
Bonding Company on Hook for Payment Bond Claim Even When Dispute Resolution Efforts Not Initiated by Sub
Bonding companies often argue that payment is not yet due under a payment bond because of “pay if paid” clauses, alternative dispute resolution (“ADR”) requirements, or other provisions of subcontracts that purport to delay recovery until the resolution of the dispute between the Owner and Contractor. But the case of Strittmutter Metro, LLC v. Fidelity […]
Contractors + Subcontractors at Risk When Owner Fails to Pay Architect
We have long counseled Owners about the risks associated with the standard AIA contract language stating that the Architect’s Drawings are “Instruments of Service” and the license to use them can be withheld by the Architect in the event there is a dispute between the Owner and Architect – involving payment or otherwise. It is […]
General Contractors + Construction Managers Face OFCC’s Rejection of Subcontractors without Additional Compensation
General Contractors and Construction Managers that do work with the OFCC should be aware of the OFCC’s purported right to reject certain subcontractors without having to pay for the additional costs that usually come with going to the next subcontractor. Recently the OFCC has invoked such a right and refused to pay the additional cost […]