senate Bill S6057

Relates to the unenforceability of a contract clause requiring a contractor or subcontractor to continue unapproved or disputed work

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Sponsor

Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 04 / Jan / 2012
    • REFERRED TO JUDICIARY
  • 01 / May / 2012
    • 1ST REPORT CAL.625
  • 02 / May / 2012
    • 2ND REPORT CAL.
  • 07 / May / 2012
    • ADVANCED TO THIRD READING
  • 18 / Jun / 2012
    • PASSED SENATE
  • 18 / Jun / 2012
    • DELIVERED TO ASSEMBLY
  • 18 / Jun / 2012
    • REFERRED TO JUDICIARY

Summary

Relates to the unenforceability of a contract clause requiring a contractor or subcontractor to continue unapproved or disputed work.

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Bill Details

See Assembly Version of this Bill:
A8841
Versions:
S6057
Legislative Cycle:
2011-2012
Current Committee:
Assembly Judiciary
Law Section:
General Obligations Law
Laws Affected:
Amd ยง5-322.1, Gen Ob L

Sponsor Memo

BILL NUMBER:S6057

TITLE OF BILL:
An act
to amend the general obligations law, in relation to the
unenforceability of a contract clause requiring a contractor or
subcontractor to continue unapproved or disputed work

PURPOSE OR GENERAL IDEA OF BILL:
To forbid agreements in construction
contracts which require contractors or subcontractors to commence or
continue unapproved or disputed work.

SUMMARY OF SPECIFIC PROVISIONS:
Section 5-322.1 of the General
Obligations Law is amended to declare void and unenforceable
construction contract provisions which require contractors or
subcontractors to commence or continue unapproved or disputed work.

JUSTIFICATION:
Contract clauses which require subcontractors to
commence or continue work on a project notwithstanding that the work
is in dispute or not yet approved by the owner puts the subcontractor
at risk of not being paid for the work he or she completes. These
clauses are found in many construction contracts and are the cause of
unnecessary and costly litigation and arbitration. This bill
endeavors to cure this problem by making such clauses void and
unenforceable. Contractors and subcontractors who refuse to commence
or continue , unapproved or disputed work will no longer be liable
for delay damages due to their refusal.
The bill will also provide an incentive for owners to settle disputes
and process change orders.

PRIOR LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
This act shall take effect immediately and shall apply
to all contracts executed on and after the effective date.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

    S. 6057                                                  A. 8841

                      S E N A T E - A S S E M B L Y

                               (PREFILED)

                             January 4, 2012
                               ___________

IN  SENATE  --  Introduced by Sen. DeFRANCISCO -- read twice and ordered
  printed, and when printed to be committed to the Committee on  Judici-
  ary

IN  ASSEMBLY -- Introduced by M. of A. CUSICK, P. RIVERA, RUSSELL, STEV-
  ENSON, CASTRO -- Multi-Sponsored by -- M. of A. SCHIMEL --  read  once
  and referred to the Committee on Judiciary

AN  ACT  to  amend the general obligations law, in relation to the unen-
  forceability of a contract clause requiring a  contractor  or  subcon-
  tractor to continue unapproved or disputed work

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Subdivision 2 of section 5-322.1 of the general obligations
law, as added by chapter 224 of the laws of 2009, is amended to read  as
follows:
  2.   A  covenant,  promise,  agreement  or  understanding  in,  or  in
connection with or collateral to a contract or agreement relative to the
construction, alteration, repair or maintenance of  a  building,  struc-
ture,  appurtenances  and  appliances  including  moving, demolition and
excavating connected therewith, (A) purporting to  condition  a  subcon-
tractor's  or  materialman's  right  to  file a claim and/or commence an
action on a payment bond on exhaustion of another legal  remedy  OR  (B)
WHICH  REQUIRES  A  CONTRACTOR  OR SUBCONTRACTOR TO COMMENCE OR CONTINUE
WORK NOTWITHSTANDING THAT THE WORK AND/OR THE PRICE FOR THE WORK  IS  IN
DISPUTE  OR  HAS NOT BEEN APPROVED BY THE OWNER is against public policy
and is void and unenforceable; provided that this subdivision shall  not
affect  the  validity  of  any insurance contract, workers' compensation
agreement or other agreement issued by an admitted insurer.
  S 2.  This act shall take effect immediately.


 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13599-01-1

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