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

The Massachusetts Prompt Pay Statute and Back Charges

I recently had the occasion to file my first lawsuit under the (relatively) new Prompt Pay Statute in Massachusetts.  The Prompt Pay Statute applies to construction projects of three million dollars or more.  There is a clause in the law that covers change orders.  It states that in order for a change order to be rejected, the owner or higher level contractor must state the contractual or factual basis for the rejection, and must certify that it is made in good faith.  The rejection also has to be made within a certain amount of time after submission of the change order depending on the level of the contractor (30 days for the owner plus 7 days for each level of subcontractor on down).  As part of this lawsuit, I alleged that back charges were issued late in violation of the contract, but I also stated that back charges are simply change orders after the fact, and for that reason,  the owner should have to state the contractual or factual basis for the back charges and certify that they are made in good faith.

What do you think?

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