[CLC-Discussion] Subcontractor Bound After Contractor Default

[Bruce Partington]

Most standard Owner/Contractor forms have a “conditional assignment” of subcontracts in the event of termination (its section 5.4 of the 2010 A201 General Conditions).  Sub would be bound to perform under flowdown provisions probably.

Watch out for licensing issues if the owner (or surety) becomes the assignee of a bunch of subcontracts and is not itself licensed.

Bruce D. Partington
Clark Partington
bpartington at cphlaw.com<mailto:bpartington at cphlaw.com>
Direct: 850-432-1399
Fax: 850-432-7340
*Board Certified in Construction Law

From: clc-discussion-bounces at lists.flabarrpptl.org [mailto:clc-discussion-bounces at lists.flabarrpptl.org] On Behalf Of Reese J. Henderson, Jr.
Sent: Tuesday, June 09, 2015 9:07 AM
To: clc-discussion at lists.flabarrpptl.org
Subject: [CLC-Discussion] Subcontractor Bound After Contractor Default

If anyone has insight into the circumstances under which a subcontractor remains bound to perform after the owner default terminates the general contractor mid-project and the contractor’s surety enters into a takeover agreement with the owner, please reply to me.  I am wondering whether a generic “inures to the benefit of the parties’ successors and assigns” clause is sufficient to bind the subcontractor to enter into an agreement with the completing surety to complete the work or whether a more specific conditional assignment of the subcontract to the contractor’s surety is required.

Thanks,
Reese

Reese J. Henderson, Jr. | Shareholder
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