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Contract wording, is this allowable?

New Jersey

Good afternoon We have this wording in an upcoming contract is this allowable, and can we cross if off and replace with better more favorable terms for us, the subcontractor? 5.1.5 REMOVAL OF LIEN/SUBCONTRACTOR PAYMENT FAILURE. If any subcontractor, laborer or materialman of the Subcontractor or any person or entity directly or indirectly acting for or through it files a mechanics' lien, stop notice or other claim against the Project, the property, or any part thereof, or any improvements thereon or against monies due or to become due from the Owner to the Contractor or from the Contractor to the Subcontractor, for or on account of any work, labor, services, materials, equipment or other items furnished in connection with the work or any change order in connection with the Project, the Subcontractor agrees to satisfy, remove, or discharge such liens or claims at its own expense by bond, payment or otherwise within five (5) days of the date of filing thereof. If the Subcontractor shall fail to do so, the Contractor shall have the right, in addition to all other rights and remedies provided by the Contract Documents or law, to satisfy, remove, or discharge such liens or claims by whatever means the Contractor chooses at the entire expense of the Subcontractor, including legal fees. The Contractor shall have the right to retain out of any payments due or to become due to the Subcontractor a reasonable amount to protect the Contractor from any and all loss, damage or expense including attorney's fees arising out of or relating to any such claim or lien until the claim or lien has been satisfied by the Subcontractor. In the event the Contractor has reason to believe (other than through a lien filing) that labor, material or other obligations incurred in the performance of the Subcontractor's Work are not being paid, the Contractor shall give written notice to the Subcontractor and may take any steps deemed necessary to insure that any progress payment shall be utilized to pay such obligations. If upon receipt of said notice, the Subcontractor does not: (a) supply evidence to the satisfaction of the Contractor that the monies owing to the claimant have been paid; or (b) post a bond indemnifying the Owner, the Contractor, the Contractor's surety, if any, and the premises from such claim or lien; then the Contractor shall have the right to retain out of any payments due or to become due to the Subcontractor a reasonable amount to protect the Contractor from any and all loss, damage or expense including attorney's fees arising out of or relating to any such claim or lien until the claim or lien has been satisfied by the Subcontractor. Upon execution of this Subcontract or as soon thereafter as possible Subcontractor shall furnish to Contractor a list of the names and addresses of all persons or entities with whom Subcontractor has or will enter into a contract for the performance of any part of the Subcontractor's work. Subcontractor understands that Contractor may rely upon this list in ascertaining who, if anyone, has lien rights against the Project or the funds due the Contractor from the Owner, and agrees to be liable for all damages, including attorney's fees, incurred by the Contractor as a result of any errors or omissions in the list.

1 reply

May 31, 2023
It is ill-advisable to publicly post the content of ones confidential business contracts. That is probably why no attorney has responed to this post. If you are in need of specific advice for a current legal situation, you may want to consider reaching out to a licensed attorney in your state directly at their office. This forum is public, so it may not be the right place to discuss a sensitive legal issue. Levelset provides a list of attorneys in each state here: https://www.levelset.com/payment-help/experts/experts-by-state/ . From that directory you may find a law firm in your area to call privately.
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