The clauses that cause most disputes
Payment terms, change orders, and delay provisions generate a large share of commercial construction disputes. A contract may set a fixed price, a cost-plus arrangement with a ceiling, or something in between, and each puts the risk of overruns in a different place. Change order clauses usually require written authorization before extra work begins, and parties who rely on verbal approvals often end up arguing about them later. Notice provisions for claims and delays tend to be strict, and New York courts frequently enforce them as written. Many contracts also limit damages for delay, and New York generally enforces those clauses subject to narrow exceptions. Standard industry forms are common starting points, but their default terms are often modified.
Payment rights in New York
Subcontractors often see clauses saying they will be paid when the owner pays the general contractor. New York courts have refused to enforce clauses that make payment entirely conditional on the owner paying, while clauses that address only timing are treated differently. New York also has a prompt payment law covering many private construction projects, a lien law that gives unpaid contractors and suppliers a claim against the property, and trust fund rules for money received for a project. Lien rights have to be exercised within a limited period after the work, so delay can cost you that remedy. Keep the signed contract, change orders, payment applications, lien waivers, and correspondence about disputed work organized by date.
Before signing, and once a dispute starts
If you are reviewing a commercial construction contract before signing, we focus on the scope documents, payment and retainage, change procedures, delay and termination provisions, indemnity, insurance, and the dispute resolution clause. If a dispute is already underway, we start with the notices sent and received, the schedule history, and what the contract says about continuing work while the dispute is resolved, since stopping work without a contractual basis can create a separate breach. In a first meeting, we ask where the project is, what your role is, the amount in dispute, and which deadlines may already be running under the contract or the lien law.
