March 16, 2007

InBusiness Las Vegas
Q&A March 16, 2007
Pezzillo Robinson PC
Brain J. Pezzillo, Esq.

Q: I am a subcontractor on a project. I have not been paid for my work and the general contractor will not pay me because he has not been paid by the owner, what are my rights?

A: The first place to start is the language contained within your contract. Pay-if-paid provisions are common in construction contracts and this may be what the general contractor is referring to. In Nevada, however, the extent to which they will be enforced is questionable. The Nevada Legislature has enacted legislation, commonly referred to as the Private Work Prompt Pay Act, which allows contractors to both stop work and subsequently terminate their contract in the event of non-payment. One exception to this is if payment is being withheld is due to the existence of a valid pay-if-paid or pay-when-paid provision. Recent cases highlight the fact that states are split as to the enforceability of such contract provisions.

One reason that some courts have refused to enforce pay-if-paid provisions is because such provisions may interfere with one's rights to record and enforce mechanic's lien claims. Nevada, however, has expressly forbid waivers of mechanic's liens rights, thus, even in the event that a contract contains a valid pay-if-paid provision, such provision would not prevent you from recording and foreclosing upon your mechanic's lien.

Articles Main