Senate Passes Fairness in Construction Contracting Bill
Kegler Brown Construction Newsletter October 1, 1996
After extensive discussion, negotiation and drafting, the general contractors of the State represented by AGC-Ohio and the subcontractors represented by the Ohio Subcontractors Council (ASA) have reached a compromise and consensus industry bill-Sub. S.B. 106.
The legislation is designed to remedy certain inequities in construction contracting created by adverse court decisions or unfair practices within the industry and contains the following elements:
- Requires subcontractors and suppliers to provide a Notice of Furnishing to preserve bond rights (as is the current law for mechanic's lien rights).
- Clarifies the existing anti-indemnity statute to provide that one cannot force another to pay the attorney's fees and costs arising from a person's own negligence.
- Prohibits as against public policy:
- waiving bond rights by contract without payment
- waiving pending claims by final payment
- "No damage for delay" clauses.
These provisions should cause a more equitable sharing of risk in the construction process rather than simply shift all risk to the party least able to manage or control that risk, and as a result create a fairer and more competitive construction marketplace, ultimately benefiting all Ohioans.
The bill passed by a 32-1 margin in the Senate on May 28, 1996 and is now pending in the House of Representatives.