In New York any provision in a construction contract that attempts to prohibit another party to the contract from suspending work under the construction contract if another party fails to make prompt payments under the contract is void. Note that this prohibition only applies to “construction contracts” as that term is defined under General Business Law Article 35E (Section 756). Generally, the GBL defines a construction contract as a contract for construction where the aggregate cost of construction is more than $250,000.00. Excluded from this definition is certain residential construction projects and all public construction projects.
Vincent T. Pallaci is a partner at the New York law firm of Kushnick Pallaci, PLLC where his practices focuses primarily on construction law. He can be reached at (631) 752-7100 or email@example.com