You’ve had it.
They can take their job and shove it!
But can you really tell an owner on a construction project to proverbially shove it where the sun don’t shine?
Well, far be it for me to tread on your First Amendment Rights or stick my nose into the subsequently brought public disturbance charges against you. But can you legally tell an owner to shove it, and that you’re no longer going to perform work on their [insert expletive] project? Well, indeed you can, in limited circumstances, and it’s called a “Stop Work Notice.”
Note: A stop work notice is different from a stop payment notice.
What is a stop work notice?
A stop work notice is a notice given by a direct contractor to a project owner that the contractor will stop work if an amount owed to the contract is not paid within 10 days after notice is given.
On what types of projects can a stop work notice be served?
Private works projects only.
Who can serve a stop work notice?
Didn’t you read the above? Sorry, I’ve gotten surly writing this post. Only a direct contractor. That is, a contractor that has a direct contractual relationship with the project owner.
Under what circumstances can a stop work notice be served?
Here’s the big limitation. A direct contractor can only serve a stop work notice if it is not paid amounts due: (1) pursuant to a written contract; (2) within 35 days after the date payment is due under the contract; and (3) (the biggie) there is no dispute as to the satisfactory performance of the contractor.
Is there anything a direct contractor needs to do before or during service of a stop work notice?
Yes, at least 5 days before serving a stop work notice, a direct contractor must post a notice of intent to serve a stop work notice at a conspicuous location at the project site, as well as at the main office at the project site, if one exists.
Furthermore, at the same time as serving a stop work notice, a direct contractor must serve a copy of the stop work notice on all subcontractors with whom the direct contractor is in contract with.
Is there anything a project owner needs to do when served with a stop work notice?
Yes, within 5 days after receipt of a stop work notice, a project owner must serve a copy of the stop work notice on its construction lender(s), if any.
How are delay and other damages impacted by a stop work notice?
Clearly, stopping work on a construction project has all sorts of ramifications. It adversely effects a project owner’s schedule, impacts a subcontractor’s mobilization, overhead and other project costs, and raises issues such as whether a subcontractor can bring a breach of contract claim against the direct contractor.
- Delay-Related Damages: A direct contractor or the direct contractor’s surety, or a subcontractor or a subcontractor’s surety, is not liable for delay or damages that the project owner or a contractor of a subcontractor may suffer as a result of a direct contractor serving a stop work notice and subsequently stopping work, so long as the notice and posting requirements are satisfied.
- Other Damages: A direct contractor or original subcontractor’s liability to a subcontractor or material supplier after a direct contractor serves a stop work notice and subsequently stops work is limited to the amount the subcontractor or material could otherwise recover for work provided up to the date the subcontractor or material supplier ceases work, subject to the following exceptions: (1) A direct contractor or original subcontractor’s liability shall not extend beyond the 10-day notice period; and (2) The limitation on a direct contractor and original subcontractor’s liability shall not apply to custom work, including materials that have been fabricated, manufactured, or ordered to specifications that are unique to the project.
If a direct contractor stops work after a project owner fails to pay within 10 days after service of a stop work notice, what remedies are available to the parties?
If payment of the amount claimed by a direct contractor is not made within 10 days after the direct contractor serves a stop work notice, either the direct contractor, direct contractor’s surety, or project owner may bring an expedited legal action in the superior court of the county in which the project is located to seek a judicial determination of liability for the amount due.
The court is required to set an expedited hearing or trial at the earliest possible date in order that the dispute be quickly heard and determined.
Can a project owner contractually require that a direct contractor waive the right to serve a stop work notice?
And, finally, for your listening pleasure . . .