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Ask Dimitry K., Esq. Your Own Question
Dimitry K., Esq.
Dimitry K., Esq., Attorney
Category: Legal
Satisfied Customers: 41221
Experience:  Multiple jurisdictions, specialize in business/contract disputes, estate creation and administration.
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I, Construction General Contractor has questions regarding

Customer Question

I, Construction General Contractor has questions regarding GC sub-agreement rights. The questions are in regards ***** ***** Subcontractor, who did not follow GC sub-agreement rules. GC wishes to discontinue using SUB for not abiding by sub-agreement terms. Also SUB owes back credit from job that took place Terms SUB did not abide are as follows:
1. WORKERS COMPENSATION INSURANCE Workers Compensation & Occupational Disease Insurance by all applicable state/federal laws, with Employers Liability insurance limits of at least $500,000/$500,000/$500,000. OHI, Inc. shall be added as an Additional Insured on each subcontractor policy, verified by a Certificate of Insurance & receipt of the Additionally Insured form. The policy shall include a Waiver of Subrogation endorsement in favor of the Additional Insured listed.
• GC received notice from SUB insurance carrier, via postage mail, post performance of hired duties, that WC insurance canceled due to non-payment.
2. TIME & COMPLETION Subcontractor shall start & complete work under this Agreement by reasonable schedules set forth by Contractor. Subcontractor shall reimburse Contractor for any costs/penalties levied against Contractor due to the negligence or non-performance of the Subcontractor, & such costs/penalties may be deducted from the amount due to Subcontractor under this Agreement. Contractor agrees to contact Project Manager Andy Baran, between 6:30-7:30 am morning of job NO MATTER THE WEATHER or CIRCUMSTANCES. Contractor agrees to contact Project Manager Andy Baran at the end of each work day NO MATTER THE WEATHER or CIRCUMSTANCES to discuss job progress- CELL(###) ###-#### ***** t o do so may result in the loss of job & pay. FAILURE to show up on a scheduled job & not report by calling Andy Baran will result in a $250 fine.
• SUB failed to show up on time and date set 3 consecutive days.
3. DEFAULTS & TERMINATION In the event Subcontractor interferes with the general progress of the general contract by negligence or delay, or Subcontractor abandons this contract or fails/refuses to furnish labor /materials at required under the terms of this Subcontract, Contractor may at its election takeover said Subcontract, complete the same or cause the same to be completed and charge all sums of money so expended for the completion of this subcontract against the subcontractor and subcontractor agrees to reimburse the contractor for any loss sustained thereby.
• SUB failed to show up on time and date set 3 consecutive days. GC hired different subcontractor to finish assignment not finished by original SUB costing additional monies and customer relations.
4. ASSIGNMENT & SUBCONTRACTING This Agreement may not be assigned or subcontracted, in full or in part, by Subcontractor without first obtaining the written consent of Contractor. Subcontractor shall not be relieved of its full responsibility for completion of the work because of the subletting of any portion of the work. All obligations of the Subcontractor, including all insurance/permit/license requirements, shall be binding on their subcontractor, insofar as they are applicable to the work sublet.
• SUB hired outside subcontractor, did not inform GC that they hired outside subcontractor. GC did not OK SUB to hire an outside subcontractor to perform duties they were hired by GC to perform.
GC owed back credit of $7000 for 2008 job SUB paid in full by GC, but SUB work performance later deemed by structural unsound by Structural Engineer and Village. GC has not been reimbursed $7000 payment and would like to credit from the final payment of monies due SUB for the job performed when not abiding by above sub-agreement.
1. Can GC take $7000 credit for 2008 job that SUB performed under par, and never reimbursed GC for being paid in full? FYI, GC never paid in full took 100% loss of $25,000 job. Can GC take this credit due from final money due SUB on job that they did not abide by sub-agreement terms? SUB signed agreement for recent job but not 2008 job.
Submitted: 2 years ago.
Category: Legal
Expert:  Dimitry K., Esq. replied 2 years ago.
Thank you for your question. Please permit me to assist you with your concerns.
Let me answer your concerns directly, and specifically based on the fact the the 2008 agreement was never signed. If the information is not as your hoped, kindly do not blame the messenger. You asked:
Can GC take $7000 credit for 2008 job that SUB performed under par, and never reimbursed GC for being paid in full? FYI, GC never paid in full took 100% loss of $25,000 job. Can GC take this credit due from final money due SUB on job that they did not abide by sub-agreement terms? SUB signed agreement for recent job but not 2008 job.
No, the GC cannot take the funds. There is a 6 year statute of limitations on debts, and unless the sub-contractor agreed to return the funds in writing AND also agreed to have those funds withheld (both have to be present), the GC is beyond the statutory period to enforce the debt, and therefore is beyond the ability to seek a means to withhold the funds lawfully. The GC cannot take this credit from the final project because the funds owed are utterly unrelated to this project for which the sub-contractor performed the work. As the jobs are unrelated, so are the debts, and one job cannot cover the debts of the past obligation.
Sincerely,
Dimitry, Esq.