Construction Law Archives

Sep 12, 2022

New Law Reduces Retainage of Georgia Public Construction Projects

One of the bills of interest to construction professions in the 2021-2022 session of the Georgia General Assembly, Senate Bill 438[1], recently passed and alters how much retainage is withheld on public construction projects. Public owners[2] executing construction contracts have traditionally been allowed to withhold up to 10 percent retainage from each progress payment until a project is 50 percent complete, and then no further retainage is allowed to be withheld if the progress of work is satisfactory. However, public owners could increase retainage back up to 10 percent if the owner determined the contractor’s work was unsatisfactory or behind… Read more

Apr 28, 2022

A Century Later: Implied Duty of Good Faith and Fair Dealing Still Going Strong

Parties to construction contracts are often surprised to learn that they are bound to implied unwritten contract obligations in addition to the written terms of their contracts. Courts in the United States began to recognize certain implied contract obligations about 100 years ago in circumstances where application of the common law rules of contract formation and interpretation would lead to results that the parties to the contract clearly did not intend. As a result, the courts required that the implied contract obligations be consistent with and necessary to carry out the express terms of the contract, such that it could… Read more

Dec 16, 2021

New York Introduces Joint and Several Liability for Prime Contractors and Subcontractors for Unpaid Wage Claims

New York Governor Kathy Hochul recently signed into law Senate Bill S2766-C, which amends the New York Labor Law (NYLL) and General Business Law (GBL) in relation to actions for non-payment of wages, and importantly, creates joint and several liability between a prime contractor and a subcontractor acting at any tier for unpaid wage claims brought against the subcontractor. Specifically, S2766-C amends NYLL §198 by adding section 198-e. Section 198-e provides that a contractor will assume liability and be jointly and severally liable with a subcontractor for any debt resulting from an action brought by a wage claimant or a… Read more

Oct 21, 2021

Have you considered an Escalation Clause to cope with Rising Costs?

Earlier this year, the soaring cost of lumber and other construction materials made headlines throughout mainstream media as contractors and owners grappled with the consequences of market volatility. While the construction industry has seen a significant decrease in the cost of lumber in recent months, the August 2021 Producer Price Index published by the Bureau of Labor Statistics reported that the cost of materials and components for construction have increased 19% over the past 12 months.¹ In light of this market volatility, it is unsurprising that third quarter data from the U.S. Chamber of Commerce Commercial Construction Index indicates that… Read more

Jan 12, 2021

Georgia Contractors Forfeit Contract Rights if Performing Work While Unlicensed

A recent Georgia Court of Appeals case highlights the serious risks contractors face if they operate in Georgia without a valid contractor’s license: they forfeit all rights to enforce their contracts. In Saks Management and Associates, LLC v. Sung General Contracting, Inc.[1], general contractor Sung General Contracting, Inc. (“Sung General”) entered into a contract with Saks Management and Associates, LLC (“Saks”) to renovate an apartment complex owned by Saks.[2] Saks terminated Sung General for failure to timely and properly complete its work, and then brought a lawsuit against Sung General to recover its damages.[3] Sung General responded to the lawsuit… Read more

Aug 6, 2020

Georgia Governor Signs Lien Waiver Senate Bill

On August 5, 2020, Georgia Governor Brian Kemp formally signed into law Senate Bill (SB) 315[1] to restore statutory lien and bond waivers to their original intended purpose of waiving lien and bond rights only and to resolve the confusion caused by ALA Construction Services, LLC v. Controlled Access, Inc.[2], in which the Georgia Court of Appeals held that Georgia statutory lien waivers can also waive breach of contract claims.[3] SB 315 will take effect on January 1, 2021. Lien waivers signed from that point forward will only waive lien and bond rights, and not other claims, to the extent… Read more

Jun 22, 2020

Lien Waiver Senate Bill Passes Georgia House of Representatives

The Georgia House of Representatives has followed the State Senate’s lead and passed Senate Bill (SB) 315[1] to restore statutory lien and bond waivers to their original intended purpose of waiving lien and bond rights only. We informed you in previous SGR Construction Blogs of SB 315 and its goal of addressing the confusion caused by ALA Construction Services, LLC v. Controlled Access, Inc.[2], in which the Georgia Court of Appeals held that Georgia statutory lien waivers can also waive breach of contract claims.[3] Prior to the ALA Construction decision, most Georgia construction professionals understood that Georgia statutory forms only… Read more

Apr 7, 2020

Does Georgia’s Stay-at-Home Order Apply to Construction Projects?

On Thursday, April 2, Governor Brian Kemp signed an executive order (the “Order”) requiring Georgians to shelter in place until April 13 at 11:59 p.m. The stay-at-home order, titled “Executive Order to Ensure a Safe & Healthy Georgia,” replaces all prior stay-at-home orders issued by local governmental bodies and prohibits localities from varying the Order’s requirements. The Order is available here. How does Georgia’s stay-at-home order affect your construction project? Unfortunately, the Order is unclear. However, at least some private projects could be stopped by the Order. The Order divides all businesses, including contractors and subcontractors, into Critical and Non-Critical Infrastructure. … Read more

Apr 6, 2020

Georgia Senate Passes Bill to Address Recent Lien Waiver Controversy

The Georgia State Senate recently passed a bill designed to address the scope of statutory interim and final lien waivers in light of the recent decision in ALA Construction Services, LLC v. Controlled Access, Inc.[1] In a previous SGR Construction Blog, we informed you of the Georgia Court of Appeals’ holding in ALA Construction that Georgia statutory lien waivers can also waive breach of contract claims.[2] This decision created great confusion within the construction industry, as most construction professionals previously understood the statutory forms as waiving lien and bond rights only. Senate Bill (SB) 315[3], introduced by Sen. Lindsey Tippins… Read more

Nov 5, 2019

Georgia’s Court of Appeals Holds that Lien Waivers Waive Breach of Contract Claims

A recent decision by the Georgia Court of Appeals will force most construction professionals to radically change their view of the scope and effect of statutory lien waivers in the state of Georgia. In ALA Construction Services, LLC v. Controlled Access, Inc., the Court of Appeals held that a lien claimant’s executed statutory lien waiver waived not only the claimant’s lien right but also rights the claimant may have to bring a related breach of contract action.[1] In ALA Construction, ALA Construction Services, LLC (“ALA”), contracted with Controlled Access, Inc. (“Controlled Access”), to provide equipment and other services for a project… Read more