In this blog we will explore the scope of permissible back charges that an upper tier contractor can levy against a lower tier contractor pursuant to a subcontract. The basic tenement of contract law is that the non-breaching party is entitled to be put into the position as if the contract had been properly performed by all parties. In other words, the damages are limited to what the parties would have received had the contract been fully and properly performed.

Continue Reading Scope of Permissible Backcharges on a Construction Contract

In State, County, or Municipal projects, payment bonds are typically required of the general contractor, as the commercial Construction Lien Law is inapplicable to these projects. Copies of the payment bond are always provided to the relevant government agency, as well as to all direct subcontractors or suppliers with whom the general contractor has directly contracted.

Continue Reading Required Notification to Be Beneficiary Under a Payment Bond

It would be unusual for a large to medium scale construction project to be completed without the general contractor experiencing issues with at least some of its subcontractors or suppliers.

Under such circumstances, it is typical for back charges to be assessed by the general contractor against the subcontractor or supplier who failed to perform properly pursuant to the terms of their contract. If the possibility of litigation looms in the future concerning such issues, or even if it may not, it is suggested that the general contractor carefully document any potential back charges against the subcontractor or vendor.

Continue Reading Documenting Backcharges on Construction Projects

If you are a contractor or subcontractor in New Jersey who is involved in the construction or renovation of residential structures, you should be aware of the requirements for filing a construction lien on a residence.

This process is markedly different from the filing of a construction lien with regard to a commercial property. The process to file a residential construction lien is outlined within N.J.S.A. 2A:44A-21.

In a commercial construction setting, a construction lien only has to be filed with the county clerk within 90 days of the last date the contractor or vendor provided the materials and services. On the other hand, the process for filing a lien on a residential property is much more involved.

Continue Reading Filing a Residential Construction Lien in New Jersey

In general, a contractor or supplier is entitled to file a lien against a commercial property if they have performed work or provided materials pursuant to a written contract with the owner. These lien claims must be filed within 90 days of the last date of providing materials or services for the project.

On the other hand, if a contractor or supplier is providing materials or services for a tenant of a commercial property, the rules are different. The differences as to what the lien may attach to are discussed in detail below.

Continue Reading Construction Liens on Leased Commercial Premises

Although it is typical for AIA form contracts to contain arbitration clauses, as a contractor you should consider whether you should have an arbitration clause in your construction agreement. As discussed below, there are numerous factors to consider in determining whether mandatory arbitration is the preferred dispute resolution mechanism, or whether the state court system is preferred. Although arbitration may have some advantages, there are also disadvantages which must be considered rather than simply adopting the AIA form. Continue Reading Should I Have an Arbitration Clause in My Construction Contract?