In virtually every industry, contracts are the instruments which govern the relationship between two entities that wish to conduct business. As such, it is helpful to know the basics as to what constitutes a binding contract to provide materials or services.
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.
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.
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.
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?
The purpose of this blog is to provide a general overview of the basics of filing commercial construction liens. It must be noted, however, that the procedure for filing a construction lien on a residential project is an entirely different process. Continue Reading The Basics of Commercial Construction Liens
While many contractors may not be aware of the existence of the New Jersey Prompt Payment Act, its application to construction litigation where payment is sought under either a general-contract or sub-contract is important to the industry. Continue Reading The New Jersey Prompt Payment Act
Whether you are a general contractor or a subcontractor, you have probably come across a pay when paid clause within a subcontract or general contract. The idea of the clause is that the contractor or subcontractor would not be responsible for payment to a lower-tier contractor unless and until it has received payment pursuant to its contract with an upper-tier contractor or owner. While this is a good idea, the Courts have often found such provisions to be unenforceable.
In general, a contractor, subcontractor, or supplier is entitled to file a construction lien on a commercial project provided that the lien is filed within 90 days of the last date the entity provided materials or services with regard to the subject project. There are certain requirements, however, that must be met prior to being able to file a construction lien.
The first requirement is Continue Reading Your Right to File a Construction Lien on a Commercial Project
At times, it may become necessary to amend a construction lien claim after if it is initially filed. The relevant statutory authority which addresses this issue is codified by N.J.S.A. 2A:44A-11. In general, this section provides that a lien claim may be amended for any appropriate reason, including but not limited to, correcting inaccuracies in the lien claim or errors in the original form, or revising the amount claimed in the lien claim. Continue Reading Amending a Construction Lien Claim