Imagine a severe thunderstorm damages a local public school such that classes cannot be held. Total repairs will cost almost $1.5 million and they must be completed soon so classes can resume.
What if you’re the contractor working diligently to repair the school building so students can resume classes? You promptly finish all the work, the school district pays for 2/3 of your work, but refuses to pay the balance, so you file a lawsuit against the school district.
But, the school district successfully argues your contract was void an unenforceable. Without a valid contract, the school district has no duty to pay for any of your work. Unfortunately, under the Virginia Public Procurement Act, the school district wins the lawsuit; so, it doesn’t have to pay you for the work that you timely and properly completed and it could sue you for return of the partial payments.
This recently happened to a public contractor in Virginia. Under the Virginia Public Procurement Act, there are provisions to expedite the creation of some contracts, but the public entity must properly justify and document the process.
Contractors, protect your rights by:
- Knowing the law governing your project and
- Verifying the public entity has complied with that law before it’s too late.
In this case, the Contractor performed its work well, but didn’t verify the public entity was properly performing its obligations until it was too late.
Roads & Bridges
Where Does the Buck Stop?
Jon is a monthly contributor to Roads & Bridges magazine. He has been writing the law section for the magazine since January 2020. The link below will take you directly to the Roads & Bridges […]
Pay-If-Paid Unenforceable in Virginia Starting Jan. 1, 2023
As of Jan. 1, 2023, pay-if-paid clauses are unenforceable, regardless of whether a surety/payment bond claim is involved. This is only for subcontracts created on/after 1/1/23.
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Jonathan J. Straw
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