senate Bill S1216

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

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Bill Status


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

  • 09 / Jan / 2013
    • REFERRED TO JUDICIARY
  • 16 / Apr / 2013
    • 1ST REPORT CAL.296
  • 17 / Apr / 2013
    • 2ND REPORT CAL.
  • 22 / Apr / 2013
    • ADVANCED TO THIRD READING
  • 06 / May / 2013
    • PASSED SENATE
  • 06 / May / 2013
    • DELIVERED TO ASSEMBLY
  • 06 / May / 2013
    • REFERRED TO JUDICIARY
  • 08 / Jan / 2014
    • DIED IN ASSEMBLY
  • 08 / Jan / 2014
    • RETURNED TO SENATE
  • 08 / Jan / 2014
    • REFERRED TO JUDICIARY
  • 04 / Feb / 2014
    • 1ST REPORT CAL.106
  • 10 / Feb / 2014
    • 2ND REPORT CAL.
  • 11 / Feb / 2014
    • ADVANCED TO THIRD READING
  • 18 / Jun / 2014
    • PASSED SENATE
  • 18 / Jun / 2014
    • DELIVERED TO ASSEMBLY
  • 18 / Jun / 2014
    • 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:
A528
Versions:
S1216
Legislative Cycle:
2013-2014
Current Committee:
Assembly Judiciary
Law Section:
General Obligations Law
Laws Affected:
Amd ยง5-322.1, Gen Ob L
Versions Introduced in 2011-2012 Legislative Cycle:
S6057, A8841

Sponsor Memo

BILL NUMBER:S1216

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:
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.

LEGISLATIVE HISTORY: S.6057/A.8856 of 2011-2012

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. 1216                                                   A. 528

                       2013-2014 Regular Sessions

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

                               (PREFILED)

                             January 9, 2013
                               ___________

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, JAFFEE, ABINANTI, HOOPER,
  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.
                                                           LBD05000-01-3

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