Subcontractors: Conditions precedent for stopping of work; termination of subcontract; notice of termination; damages; remedies cumulative; limited liability.
1. If a contractor or higher-tiered subcontractor fails to:
(a) Pay the subcontractor within the time provided in subsection 1 or 4 of NRS 624.624;
(b) Pay the subcontractor within 45 days after the 25th day of the month in which the subcontractor submits a request for payment, even if the contractor or higher-tiered subcontractor has not been paid and the subcontract contains a provision which requires the contractor or higher-tiered subcontractor to pay the subcontractor only if or when the contractor or higher-tiered subcontractor is paid; or
(c) Give the subcontractor written notice of any withholding in the time and manner required by subsection 3 or 4 of NRS 624.624,
Ê the subcontractor may stop work under the subcontract until payment is received if the subcontractor gives written notice to the contractor or higher-tiered subcontractor at least 10 days before stopping work.
2. If a subcontractor stops work pursuant to paragraph (a) or (c) of subsection 1, the subcontractor may terminate the subcontract by giving written notice of the termination to the contractor or higher-tiered subcontractor after stopping work but at least 15 days before the termination of the subcontract. If the subcontractor is paid the amount due before the date for termination set forth in the written notice, the subcontractor shall not terminate the subcontract and shall resume work.
3. If an owner, contractor or higher-tiered subcontractor 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 in work schedules, causes the work to be stopped for a period of 15 days or more, the subcontractor may terminate the subcontract if:
(a) The subcontractor gives written notice of his intent to terminate to the contractor or higher-tiered subcontractor at least 10 days before terminating the subcontract; and
(b) The contractor or higher-tiered subcontractor fails to allow the subcontractor to resume the work within the time set forth in the written notice given pursuant to paragraph (a).
4. If a subcontractor stops work pursuant to paragraph (a) or (c) of subsection 1, the contractor or higher-tiered subcontractor may terminate the subcontract by giving the subcontractor written notice of his intent to terminate at least 15 days before terminating the subcontract.
5. If the subcontract is terminated pursuant to subsection 3, or if the subcontractor stops work in accordance with this section and the subcontract is terminated pursuant to subsection 2 or 4, the subcontractor is entitled to recover from the contractor or higher-tiered subcontractor with whom he has contracted the amount found by a trier of fact to be due the subcontractor, including, without limitation:
(a) The cost of all work, labor, materials, equipment and services furnished by and through the subcontractor, including any profit and overhead the subcontractor incurred or earned through the date of termination;
(b) The profit that the subcontractor and his lower-tiered subcontractors would have received if the subcontract had been performed in full;
(c) Interest at a rate equal to the rate agreed upon in the subcontract or, if no interest rate is so provided, 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 subcontract was signed; or
(2) If the subcontract was oral, the time the terms of the subcontract were agreed upon by the parties,
Ê plus 2 percent; and
(d) The reasonable costs, including court costs, incurred by the subcontractor and his lower-tiered 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 subcontractor or, if the trier of fact determines that the subcontractor stopped work or terminated the contract without reasonable cause, the trier of fact may award reasonable attorney’s fees to the contractor or higher-tiered subcontractor.
6. If a subcontractor stops work pursuant to this section, each lower-tiered subcontractor with whom the subcontractor has contracted who has not fully performed under the contract may also stop work on the project. If a subcontractor terminates a subcontract pursuant to this section, all such lower-tiered subcontractors may terminate their contracts with the subcontractor.
7. The right of a subcontractor to stop work or terminate a subcontract pursuant to this section is in addition to all other rights that the subcontractor may have at law or in equity and does not impair or affect the right of a subcontractor to maintain a civil action or to submit any controversy arising under the contract to arbitration.
8. No subcontractor or his lower-tiered subcontractors, or their respective sureties, may be held liable for any delays or damages that an owner, contractor or higher-tiered subcontractor may suffer as a result of the subcontractor or lower-tiered subcontractor stopping his work or terminating a subcontract for reasonable cause and in accordance with this section.
Last modified: February 27, 2006