While there is no way to absolutely guarantee that you’ll get paid for every construction job you have, whether as a sub-contractor or as a material supplier, there are three broad steps you can take to help make it more likely you’ll collect what you’re owed. At Emalfarb Law LLC and National Lien & Bond, we’ve helped clients put these steps into place and can tell you from decades of experience that they work.
First: Create and Use Internal Procedures to Track Payments and Lower Risk
Developing and using a contract checklist that includes the provisions you should try to include to help ensure you have substantial payment rights will help ensure your contract includes clauses that will benefit you if payments aren’t made according to the contract terms. And while almost every contract involves some negotiation, if you know ahead of time what payment-related clauses are essential to you, you’ll have a much better understanding of which provisions are important to you when you’re negotiating a new agreement.
Second: Reduce the Chance that Damages Clauses Will be Used to Justify Nonpayment
The focus here is on two main damages clauses that your clients may try to use to justify withholding money you’re owed for work you’ve completed or materials you’ve delivered. These are the Liquidated Damages Clause and the Waiver of Consequential Damages Clause.
Liquidated Damages clauses can be used to penalize you if a project is delayed, but in many cases, they’re unfairly used to penalize contractors and suppliers even in situations where the project delay isn’t their fault or where a delay causes no real damages. And if both sides waive the right to recover consequential damages from the other party, it makes it significantly more difficult for your client to withhold payment based on a claim that you’re responsible for anything other than the work you did or the materials you provided.
Third: Pay Attention to the Details and Enforce Your Rights
By putting a system in place to keep close track of the work you’re doing, the materials you’ve provided, and the status of the payments you’re owed, you will go a long way toward ensuring you get paid. This can include sending invoices on time, following up promptly when payment is late, making sure you follow the mechanics’ lien requirements applicable in the state where your project is located, and, where necessary, filing claims or lawsuits to recover late payments.
Emalfarb Law LLC and National Lien & Bond Can Help You Get Paid
Emalfarb Law LLC and National Lien & Bond have spent decades helping thousands of clients across the United States collect what they’re owed for work or materials they’ve provided to construction projects. We help clients negotiate contracts, develop and put in place internal procedures to help ensure payment and enforce their rights in past-due payment situations. National Lien & Bond’s co-counsel network of experienced construction law attorneys will help you collect what you’re owed no matter where your project is in the US.
To learn more about how to make sure you get paid, check out our webinar “How to Get Paid Even When Your Mechanic Lien Rights Expire,” which explains how you can protect your rights.
Call us today at (800) 432-7799 or use our contact form to schedule a free consultation to learn more about how Emalfarb Law LLC and National Lien & Bond can help you.