Contractors: Rights when owner fails to pay amounts due or give required notice of withholding; stopping of work; termination of contract; exceptions; damages; rights of subcontractors; remedies cumulative; limited liability.
1. If an owner fails to:
(a) Pay the contractor in the time and manner required by subsection 1 or 4 of NRS 624.609; or
(b) Give the contractor written notice of any withholding in the time and manner required by subsection 3 or 4 of NRS 624.609,
Ê the contractor may stop work after giving written notice to the owner at least 10 days before stopping work. If a contractor stops work pursuant to this subsection, the contractor may terminate the contract by giving written notice of termination to the owner after stopping work but at least 15 days before terminating the contract. If the contractor is paid the amount due before the date for termination of the contract set forth in the written notice, the contractor shall not terminate the contract and shall resume his work.
2. If the owner through his own act or neglect, or through an act or neglect of his agent, excluding acts of God, floods, fires, labor disputes, strikes or reasonable adjustments to work schedules, causes the work to be stopped for a period of 15 days or more, the contractor may terminate the contract if:
(a) The contractor gives written notice of his intent to terminate to the owner at least 10 days before terminating the contract; and
(b) The owner fails to allow work to resume within the time set forth in the written notice given pursuant to paragraph (a).
3. If a contractor stops work pursuant to subsection 1, the owner may terminate the contract by giving the contractor written notice of his intent to terminate at least 15 days before terminating the contract.
4. If the contract is terminated pursuant to subsection 2, or if the contractor stops work in accordance with this section and the contract is terminated pursuant to subsection 1 or 3, the contractor is entitled to recover from the owner payment in an amount found by a trier of fact to be due the contractor, including, without limitation:
(a) The cost of all work, labor, materials, equipment and services furnished by and through the contractor, including any profit and overhead the contractor incurred or earned through the date of termination;
(b) The profit that the contractor and his subcontractors would have received if the contract had been performed in full;
(c) Interest at a rate equal to the rate agreed upon in the contract or, if no interest rate is so provided, then interest at a rate equal to the prime rate at the largest bank in this State, as determined by the Commissioner of Financial Institutions on January 1 or July 1, as the case may be, immediately preceding:
(1) The time the contract was signed; or
(2) If the contract was oral, the time the terms of the contract were agreed to by the parties,
Ê plus 2 percent; and
(d) The reasonable costs, including court costs, incurred by the contractor and his subcontractors in collecting the amount due.
Ê At any action brought to enforce the rights or obligations set forth in this subsection, the trier of fact may award reasonable attorney’s fees to the contractor or, if the trier of fact determines that the contractor stopped work or terminated the contract without reasonable cause, the trier of fact may award reasonable attorney’s fees to the owner.
5. If a contractor stops work pursuant to subsection 1, each subcontractor with whom the contractor has contracted who has not fully performed under that contract may also stop work on the project. If a contractor terminates a contract pursuant to this section, all such subcontractors may terminate their contracts with the contractor.
6. The right of a contractor to stop work or terminate a contract pursuant to this section is in addition to all other rights that the contractor may have at law or in equity and does not impair or affect the right of a contractor to maintain a civil action or to submit any controversy arising under the contract to arbitration.
7. No contractor or his subcontractors, or their respective sureties, may be held liable for any delays or damages that an owner may suffer as a result of the contractor, subcontractor or lower-tiered subcontractor stopping his work or terminating a contract for reasonable cause and in accordance with this section or NRS 624.626.
Last modified: February 27, 2006