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Whose approval will you need to get paid
December 19, 2023
Whose approval will you need to get paid
          A subcontractor sued the GC for payment; moved for summary judgment and lost, case dismissed; why?  The subcontractor needed a certificate from the job architect certifying its work was completed to the satisfaction of the architect and payment was authorized.  It should be noted that this subcontractor was very aggressive, filing a mechanic lien, a trust fund diversion claim and collection cause of action.  The Judge made short rift to the case, finding that the subcontractor\s agreement required a certificate from the architect in order to get paid and that the subcontractor never got that final approval or certificate; Right to payment over.
          What does this have to do with you?  While the best practice is to get your Standard Form Agreement signed by the customer [or the Standard Subcontract Form is you’re a subcontractor] that’s not what happens all the time.  In fact, too often alarm companies are compelled, or constrained if you prefer that word, to sign whatever the customer or GC puts in front of them if they want the work. 
          I am often asked to review and comment on these “non-industry” forms.  Non-industry in the sense of alarm/security/fire alarm industry, but these contract forms are common enough in the construction industry and real estate management industry.  Review of these form is covered by the Concierge Program free half hour contract review credit each month, and plenty of Concierge Clients take advantage of that benefit, so I am well acquainted and versed in what you need to watch for.
          Almost universal is the indemnity provision, so I comment on that.  Also the insurance procurement provision requiring additional insured. 
          But I routinely do not comment on the payment provisions, rather cautioning the client to be sure to read the provisions and be prepared to live by the terms and conditions.  I find myself often adding that they need to be prepared to jump through the hoops to get paid, and too often add that they need to be prepared to walk away if they aren’t paid because the getting paid process is often too onerous, along with the dispute resolution provisions.  Keep in mind that even jobs with six figure price tag will likely have an unpaid amount that makes it difficult to pursue with any efficiency or economic benefit.  And, I should point out that not getting paid is quite different if you have the Standard Form Agreements because there aren’t any hoops or loops and the dispute resolution process is streamlined and efficient; so it’s a completely different experience.
          Be careful what you sign and understand that a customer contract form or a GC form that you are asked to sign is not going to be favorable to you as your form agreement is and should be. 
          Every effort should be made to get your Standard Contract Form signed.  Not only will you be better protect [in fact the other forms may not protect you at all and leave you accepting all the risks] in all regards, you will know your deal because you are familiar with your contract terms, which, by the way, are written in clear language actually conveying the deal you and your customer [or hiring contractor] have. 

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Ken Kirschenbaum,Esq
Kirschenbaum & Kirschenbaum PC
Attorneys at Law
200 Garden City Plaza
Garden City, NY 11530
516 747 6700 x 301