HOUSE DOCKET, NO. 94229 FILED ON: 9/9/2009
HOUSE . . . . . . . . . . . . . . . No. 4229
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The Commonwealth of Massachusetts
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In the Year Two Thousand Nine
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AN ACT TO PROMOTE FAIR CONTRACT PROVISIONS..
Be it enacted by the Senate and House of Representatives in General Court assembled, and by the authority of the same, as follows:
SECTION 1. Chapter 149 of the General Laws, as appearing in the 2008 Official Edition, is hereby amended by inserting after section 29D the following section:—Section 29E. (a) As used in this section the following words shall have the following meanings:“Construction Services”, all labor, materials or services, including specially fabricated materials, rental equipment, appliances, tools and transportation charges, and all claims related thereto used or employed, or to be used or employed, in the construction, reconstruction, alteration, erection, remodeling, repair, demolition or removal of a building, structure, or other improvement to real property, whether public or private.“Person”, individuals, corporations, organizations, trusts, associations, partnerships, companies and public agencies.“Insolvency”, as defined under federal bankruptcy law.“Commencement of Performance”, forthwith after first performing, and in any event before receiving any payment.“All reasonable legal remedies”, taking such legal action as is necessary to obtain payment unless and until there is a reasonable likelihood such action will not result in obtaining payment. (b) Any provision in a contract for or relating to construction services that makes payment to person furnishing the construction services conditional upon receipt of payment from a third person, is against public policy and is void and unenforceable, except to the extent that amounts are not received from such third person because (1) the person furnishing the construction services failed to perform under its contract and failed to cure such non-performance after receipt of notice as provided in such contract; or (2) the third person is insolvent, provided that the person seeking to assert the payment condition has claimed a lien under chapter 254 of the General Laws upon commencement of his performance, maintained and perfected such lien, and pursued all reasonable legal remedies to obtain payment. The foregoing exceptions must be expressly stated in any such contract provision, and the person seeking to assert the payment condition shall have the burden of proof as to each element. Nothing in this section or in any such provision shall be valid as a defense to enforcement of a lien claimed under said chapter 254 by the person furnishing the construction services.Any party aggrieved by the failure of the party seeking to assert the payment condition to pursue all reasonable legal remedies to obtain payment may avail itself of the summary procedure set forth in section 15A of said chapter 254 for a determination of whether all reasonable legal remedies have been fulfilled with respect to the particular lien claim at issue.Nothing contained in this section shall be construed to in any way amend any law governing payments on public construction projects, or to impose on a public agency any payment obligation beyond that imposed by law.