As I sit down to write my annual list of resolutions for contractors, I am amazed at how much things changed in 2020. Construction was going well and then, in March 2020, COVID-19 hit. At first, we thought it was going to be a disaster for the construction industry. States, cities and towns shut down projects and many applied for PPP loans. Then, something amazing happened. Construction was considered an essential service and everyone was back to work.  That said, the work world changed: companies were donating their PPE to frontline workers, COVID-19 protocols had to be followed and paperwork had to be filed. Everyone was scrambling to figure out how to comply and keep their businesses going. So, you may or may not ask, what was I, as a construction lawyer doing? I spent March and April thinking about the new risks contractors/construction companies were facing and developing contract clauses to protect the industry. I wrote a number of blog posts with clauses to add to your contra

When the Builder is Worried About Getting Paid

Let's face it. These are hard times economically, and even when an owner starts a project, at times the contractor might have legitimate concerns about getting paid. An owner will not want to pay a builder ahead of the work, but the builder will want to know that there are available funds for completion of the project.

Here is a contract clause for dealing with that issue:

The Contractor may not require that payments be made in advance of the times specified in the Payment Schedule for the reason that he deems himself or the payments to be insecure. If, however, the contractor deems himself to be insecure by reason of the following: late payments or owners refusal to pay according to payment schedule or notice of the owner’s insolvency or bankruptcy. The Contractor may require, as a prerequisite to continuing the work described herein, that the balance of payments under this contract that are in control of the Owner(s), shall be placed in a joint escrow account that requires the signature of both the Contractor and the Owner(s) for withdrawal.

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