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Can they accept the benefit of the bargain, construction work performed at considerable cost, and then refuse to pay on the grounds the contractor lacked a license?
Before subcontracting any significant portion of a long term job to someone who isn’t known to be financially solvent, the wise general will ask for proof that the sub can carry the strain of weekly payroll through a monthly requisition procedure, with retainage. How does a GC protect itself? § 5.5(a)(6).)
If an initial court challenge to the lien fails, the general contractor may well be coerced into an unfavorable settlement of the lienor’s claim. Otherwise, every payment bond would automatically convert every subcontract on the bonded project into a “no lien” subcontract. Hawkeye Funding, Ltd. 581 (2004).
When that is the case, can a general contractor with a pay-if-paid provision in its subcontracts hide behind that provision when the reason for owner nonpayment is the general contractor’s own default? JBC Merger Sub LLC v. Tricon Enterprises, Inc. , 145, 286 A.3d 3d 1186 (2022), didn’t think so. Quinn Construction, Inc.
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