Pay-if-Paid Clauses and Shortened Claim Deadlines: Polar Bear Mechanical

Reviewed September 7, 2026.

In Polar Bear Mechanical, Inc. v. Walison Corp., 2017 NY Slip Op 50848(U), the Appellate Term rejected a payment condition that shifted the owner's nonpayment risk to the subcontractor. That ruling did not save the subcontractor's late lawsuit.

The separate deadline still mattered

The agreement expressly severed unenforceable provisions and required suit within six months after an early termination. The court enforced that deadline on the record presented and affirmed dismissal of the claim against the contractor and surety. It also corrected the lower court's jurisdiction analysis: the pleaded claim could be read as one to establish a lien and recover a personal judgment.

Read payment and enforcement terms together

A clause's effect matters more than its label. A condition making payment depend entirely on the owner's payment presents a different issue from a reasonable payment-timing term. Likewise, an invalid payment condition does not automatically invalidate every contractual deadline. Record termination dates, final-application dates, notice requirements and the separate deadlines for liens and bonds in a deadline calendar before waiting for upstream payment.

Kushnick Pallaci PLLC assists clients throughout New York with construction contract drafting and review. Contact 631-752-7100 or vtp@kushnicklaw.com.

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Construction Claim Notices: Put the Contract’s Deadlines to Work

Reviewed September 7, 2026.

A valid construction claim can be lost because the project team missed a contractual notice requirement. Before work starts, identify the notices required for extra work, delay, concealed conditions, nonpayment and objections to a directive.

Create a usable notice calendar

For each requirement, record the triggering event, number of days, whether they are calendar or business days, recipient, address, delivery method and required contents. Some contracts require an initial notice followed by detailed cost and schedule support or continuing updates. Keep proof of delivery.

Negotiate impractical deadlines before signing and designate a backup when the responsible person is unavailable. Do not assume an email, meeting discussion or daily report satisfies a formal notice clause. A request for additional compensation may also require a separate request for more time.

Courts can enforce conditions precedent strictly. Waiver or other exceptions depend on the wording and evidence; project knowledge alone should not be treated as a reliable substitute for compliance. Preserve the records even while negotiating a resolution.

Contract notices are separate from mechanic's lien, bond, statutory claim and lawsuit deadlines. A pending change-order review or informal settlement discussion does not automatically pause any of them.

Kushnick Pallaci PLLC assists clients throughout New York with construction contract drafting and review. Contact 631-752-7100 or vtp@kushnicklaw.com.

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Preserve Specific Claims When Requesting More Time on a Public Contract

Reviewed September 7, 2026.

A time-extension request can also waive claims if the contract requires detailed reservations. In Matter of LAWS Construction Corp. v. Contract Dispute Resolution Board, 145 AD3d 523 (2016), the First Department upheld determinations that a broadly worded list in the sixth extension request did not adequately preserve the claims at issue.

The contractor could not rely on the City's treatment of earlier requests to overcome the contract's anti-estoppel provision and the general limits on estoppel against government entities. The court also upheld treatment of one claimed cost increase as delay damages barred by the contract.

Review the request before it is sent

Identify each reserved claim, its factual basis, affected work, dates and requested relief with the detail the contract requires. Check for releases in extensions, change orders and payment applications. A general reservation of “all rights” may not satisfy a specific requirement.

Keep the notices, supporting documents and proof of submission together. Seeking more time, preserving a compensation claim and pursuing the prescribed dispute procedure can involve separate obligations and deadlines.

Kushnick Pallaci PLLC assists clients throughout New York with public construction contracts and procurement. Contact 631-752-7100 or vtp@kushnicklaw.com.

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Out-of-State Construction Dispute Clauses: HVS and New York Law

Reviewed September 7, 2026.

In HVS, LLC v. Fortney & Weygandt, Inc., 49 Misc 3d 1143 (2015), Supreme Court, Rockland County, rejected an Ohio dispute-location clause for electrical work on a New York project. The court directed arbitration in New York and stayed the lien-foreclosure action.

This was a trial-court decision, not an appellate ruling. Its rejection of the Federal Arbitration Act argument depended on the record presented, including the local work and absence of evidence establishing the asserted interstate connection. It should not be read as deciding every federal preemption question.

Check current statutory coverage

General Business Law § 757 addresses foreign law and dispute proceedings outside New York for covered construction contracts, subject to its stated exception. The relevant statute is the General Business Law, not the General Obligations Law.

Review coverage under § 756, the contract date, forum language and any applicable federal law. Disputing the forum does not excuse missing a lien, bond or contract deadline.

Kushnick Pallaci PLLC assists clients throughout New York with construction arbitration and dispute resolution. Contact 631-752-7100 or vtp@kushnicklaw.com.

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Subcontractor Claims Against a Project Tenant: MCM Products

Reviewed September 7, 2026.

In MCM Products USA, Inc. v. Aliusta Design, 2015 NY Slip Op 32187(U), Supreme Court, New York County, dismissed Hudson Concrete Polishing's counterclaims against the project tenant on an unopposed motion. MCM leased the property; it was not the fee owner.

Hudson's agreement was with general contractor A.J.S. Its unjust-enrichment allegations sought payment for that same contractual work without facts establishing an independent obligation by MCM. The court held those allegations insufficient. A party's receipt of a benefit from construction does not, by itself, create a direct payment promise to the subcontractor.

The court separately dismissed the trust-fund counterclaims because they lacked facts supporting the alleged trust, diversion and entitlement to an accounting.

Identify each claim's actual basis

The decision concerns the pleadings and record before the court. It does not mean every subcontractor lacks lien or trust remedies whenever direct contractual privity is absent. Identify the property interests, contracting parties, payment promises, trust assets and statutory requirements before selecting or defending claims.

Kushnick Pallaci PLLC assists clients throughout New York with construction payment litigation. Contact 631-752-7100 or vtp@kushnicklaw.com.

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Contract Deadlines and Conditions: City of Troy v. 1776 Sixth Avenue

Historical case note — decision dated November 12, 2015.

In City of Troy, N.Y. v. 1776 Sixth Avenue, Troy, LLC, the Third Department enforced a landlord's obligation to install an elevator by the deadline in its lease with the City. The dispute concerned a lease and related building work, not simply a general contractor's construction agreement.

The landlord argued that discussions about the elevator's location excused its delay. The court found that the relevant documents did not make the installation deadline contingent on the City's approval of that location. The decision turned on the language of the parties' documents.

Contract-review lesson

When a completion date depends on another party providing plans, approvals or access, identify that dependency expressly. Review the main agreement together with incorporated documents, amendments and required delay notices. A planned collaboration does not necessarily create a condition excusing performance.

Kushnick Pallaci PLLC assists with construction contract drafting and review and delay disputes.

Clarified September 7, 2026. This is a historical case summary, not a complete review of later decisions or advice about a particular contract.

Nonpayment, Work Stoppage and Notice: U.W. Marx v. Koko Contracting

Reviewed September 7, 2026.

In U.W. Marx, Inc. v. Koko Contracting, Inc., 124 AD3d 1121 (January 22, 2015), the Third Department affirmed a judgment for a roofing subcontractor after trial. The general contractor had materially breached by withholding three successive progress payments without justification.

Although the subcontractor stopped work before complying with the contractual suspension notice, the prior uncured material breach excused its remaining performance in these circumstances. The court did not make the notice clause meaningless: noncompliance would prevent recovery of contractual remobilization costs if work resumed. Had nonpayment been justified, the unnotified stoppage could itself have exposed the subcontractor to damages.

Do not assume every missed payment excuses performance

Assess entitlement to payment, disputed work, the materiality of the breach and the contract's cure and suspension procedures. Give compliant notice whenever required and preserve the evidence. Contractual remedies and any applicable statutory suspension remedy require separate analysis. This school-project decision is not a substitute for following the Prompt Payment Act on a covered private project.

Kushnick Pallaci PLLC assists clients throughout New York with construction contract litigation. Contact 631-752-7100 or vtp@kushnicklaw.com.

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Contractor-Representative Decisions and Judicial Review: Staviski v. Christa

Reviewed September 7, 2026.

Staviski v. Christa Construction, Inc., 124 AD3d 1126 (2015), involved a drywall subcontract and a separate mold-remediation contract. The dispute on this appeal concerned the drywall subcontract and the contractor representative's allocation of mold-related responsibility.

The subcontract allowed the representative to decide disputes, but also permitted judicial review under its stated standard, including gross error evidencing bad faith. The Third Department affirmed denial of summary judgment because factual questions remained about the determination. Finding disputed facts did not establish that the representative necessarily had a rational basis.

Identify the agreed review process

The court distinguished this contract's review provision from the narrower review ordinarily applied to arbitration awards under CPLR article 75. It did not hold that every private ADR decision receives unrestricted judicial review, or decide the ultimate allocation of mold liability.

Before signing, identify the decision maker, any relationship to a party, the procedure for presenting evidence, the scope of review and objection deadlines. During a dispute, preserve submissions and communications that bear on the decision and any asserted interference.

Kushnick Pallaci PLLC assists clients throughout New York with construction arbitration and dispute resolution. Contact 631-752-7100 or vtp@kushnicklaw.com.

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Six-Month Construction Claim Deadline Enforced in Dart Mechanical

Reviewed September 7, 2026.

In Dart Mechanical Corp. v. City of New York, 121 AD3d 452 (2014), the First Department enforced a six-month contractual deadline and dismissed a contractor's delay-damages claim against the City.

The deadline ran from the agency chief engineer's letter establishing substantial completion under the contract. The court found the period reasonable on that record. Payment-documentation procedures were independent of the delay claim and did not prevent the contractor from suing within the deadline.

Read the trigger, not just the number of months

The original headline could suggest the City lost a late claim; the decision instead barred the contractor's claim against the City. It does not establish that every six-month limitation is enforceable in every setting.

Review the executed agreement for substantial-completion certificates, termination notices, final-payment triggers, claim reservations and mandatory dispute steps. Record the actual triggering documents when received. A pending payment application or dispute over closeout documents does not automatically postpone a separate lawsuit deadline.

Kushnick Pallaci PLLC assists clients throughout New York with public construction contract disputes. Contact 631-752-7100 or vtp@kushnicklaw.com.

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Suspending New York Construction Work for Nonpayment

Reviewed September 7, 2026.

Stopping work without the right contractual or statutory basis can create a separate breach. Before suspending, document the payment due, the reason for withholding, the contract's notice provisions and the risk to the project.

Statutory rights on covered projects

General Business Law § 756-b permits suspension in specified nonpayment circumstances on projects covered by Article 35-E. It requires advance written notice and an opportunity to cure, generally at least ten calendar days. A subcontractor must provide the required notice to both the owner and contractor. The statutory conditions, including whether payment is undisputed, must be checked.

Use the notice methods required by § 756, which defines written notice using fax and reputable overnight delivery. Do not assume an ordinary email is sufficient. Coverage exclusions mean these provisions do not govern every residential or public project.

Plan the suspension

State the payment default and proposed suspension date precisely. Coordinate site safety, protection of completed work, storage and remobilization records. Preserve lien and bond deadlines independently, and obtain advice before treating a payment dispute as permission to terminate the contract.

Kushnick Pallaci PLLC assists clients throughout New York with construction contract and payment-dispute advice. Contact 631-752-7100 or vtp@kushnicklaw.com.

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Recovering Attorney’s Fees in a New York Construction Dispute

Reviewed September 7, 2026.

Winning a construction payment case does not ordinarily entitle the winner to reimbursement of its attorney's fees. New York generally requires an applicable agreement, statute or court rule authorizing that recovery. Taxable costs and disbursements are different from reimbursement of legal fees.

In Sage Systems, Inc. v. Liss, 39 NY3d 27 (2022), the Court of Appeals rejected reliance on a broad indemnity clause that did not clearly provide for fees in a dispute between the contracting parties.

Plan before a payment dispute develops

A contract can address reasonable collection fees, litigation and arbitration, but the language must fit the intended disputes. Review whether it covers direct claims, identifies the party entitled to recover, and addresses mixed results or appeals. Consumer contracts can raise additional statutory requirements, including General Obligations Law § 5-327.

A fee clause does not guarantee full recovery or collection of a judgment. Evaluate the amount at issue, available evidence, counterclaims, likely expense and collectability. Keep itemized legal billing records if reimbursement may be sought. Old dollar estimates for litigation and court limits should not drive a current decision.

Kushnick Pallaci PLLC assists clients throughout New York with construction litigation. Contact 631-752-7100 or vtp@kushnicklaw.com.

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New York Construction Collections: Protect Payment Rights Before a Debt Becomes a Lawsuit

Reviewed September 7, 2026.

Collecting construction receivables starts with the contract and continues throughout the project. A payment demand may help resolve a dispute, but it does not preserve every lien, bond or statutory deadline.

Build a usable payment record

Identify the contracting entities, scope, price, billing requirements, change-order procedure and payment dates. Negotiate clear provisions addressing interest, collection costs and attorney’s fees where appropriate; do not assume those amounts are recoverable without an applicable agreement or statute. Keep signed contracts, delivery tickets, approved changes, daily reports, invoices and proof of submission together. Review aging receivables regularly and document the reason for each withheld payment.

Check prompt-payment protections

New York’s private construction prompt-payment law has a defined scope and exclusions. For covered contracts, General Business Law § 756-a generally requires invoice approval or written disapproval within 12 business days after receipt of the invoice and required documentation. Payment timing, lawful withholding and lower-tier payment rules require separate analysis. Review notice requirements before suspending work.

Preserve parallel remedies

A private mechanic’s lien generally has a four-month filing period for qualifying single-family dwellings and an eight-month period for other private improvements, subject to statutory exceptions and special retainage rules under Lien Law § 10. Public-improvement liens attach to project funds and follow different filing and service rules under § 12. Filing does not finish the process: calendar lien duration, extension and enforcement requirements.

Obtain any payment bond promptly. Eligible claimant tiers, notices and lawsuit deadlines depend on the bond and applicable law. Where project funds may have been diverted, evaluate Article 3-A trust remedies. Under § 77, subcontractors and material suppliers have a limitation rule tied to the later of project completion or final payment becoming due. Nonpayment alone does not establish diversion, personal liability or entitlement to attorney’s fees.

Use negotiations, mediation, arbitration or litigation as appropriate while preserving these separate rights. An early assessment of documentation, defenses, collectability and cost helps select a practical recovery strategy.

Kushnick Pallaci PLLC assists clients throughout New York with construction debt collection. Contact 631-752-7100 or vtp@kushnicklaw.com.

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Construction Insurance and Contract Risk: A New York Review Checklist

Reviewed September 7, 2026.

Review the insurance program alongside the construction contract before work begins. A contract can impose obligations that the policy does not cover, and a certificate alone does not resolve that gap.

Documents to collect

Obtain the complete policy, declarations and endorsements; the signed prime contract and subcontracts; additional-insured requirements; and any project-specific coverage restrictions. The New York Department of Financial Services small-business guide explains common policy terms and coverage categories.

Questions to resolve

• Are the correct business entities and operations insured?
• Do exclusions address residential work, height, excavation, employee injuries, subcontractors or designated projects?
• Are ongoing and completed operations addressed where required?
• What deductible or self-insured retention applies, and can defense costs reduce available limits?
• Who must receive notice of an occurrence, claim or lawsuit?

Insurance procurement and contractual indemnification are separate obligations. General Obligations Law § 5-322.1 limits specified construction indemnity agreements. Review each obligation on its own terms.

Confirm any requested change in the actual issued policy or endorsement.

Kushnick Pallaci PLLC assists clients throughout New York with construction insurance coverage and disputes. Contact 631-752-7100 or vtp@kushnicklaw.com.

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Suffolk County Home Improvement Licensing: Check Town and Village Rules

Reviewed September 7, 2026.

A Suffolk County home improvement license does not answer every licensing question on an East End project. Determine the exact town and incorporated village, the contracting entity, and the work to be performed before bidding or signing.

Check the authority for the project address

Consult Suffolk County Consumer Affairs and the applicable town or village. Southampton maintains its own home improvement licensing program. East Hampton and Shelter Island also require particular attention to local rules. Do not assume a county license replaces a required local license or registration.

Definitions and exceptions differ. Landscaping, demolition, new construction, specialty trades and work on accessory structures should be evaluated under the actual governing code. A license, building permit and trade qualification serve different purposes; having one does not establish compliance with the others.

Protect payment rights before work begins

Confirm that the license covers the business named in the contract, the project location, the work and the relevant dates. Keep the license and renewal records in the project file. Failure to hold a required consumer-protection license can defeat contract and quantum meruit claims and mechanic’s lien enforcement, as well as expose the contractor to regulatory penalties. Resolve uncertainty with the licensing authority and construction counsel before proceeding.

Kushnick Pallaci PLLC assists clients throughout New York with contractor licensing and consumer affairs matters. Contact 631-752-7100 or vtp@kushnicklaw.com.

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New York Retainage Rules: Limits and Release of Payment

Updated September 7, 2026. Retainage is the portion of a construction payment held back until the conditions for release are met. An old contract example using 10% should not be treated as the current rule for a covered New York private construction contract.

Check coverage and contract date first

The private-project Prompt Payment Act applies to contracts within General Business Law § 756, generally involving aggregate project costs of at least $150,000, subject to public-works and residential exclusions. Different rules can govern excluded projects.

Chapter 657 of the Laws of 2023 changed the retainage rule for covered contracts entered into on or after November 17, 2023. Older contracts require review of the applicable statutory version and their terms.

The five-percent ceiling

§ 756-c limits owner retainage to 5% of the contract sum. Contractor and subcontractor retainage may not exceed 5% and may not exceed the owner's actual percentage. If the owner retains 3%, a contractor cannot retain 5% downstream under that provision.

When must retainage be released?

The owner's statutory release deadline is no later than 30 days after final approval of the work. Downstream parties must release the corresponding retainage received. Improperly withheld retainage can accrue interest at 1% per month under § 756-c.

The right to submit a final invoice upon substantial completion under § 756-a is distinct from the retainage-release trigger. Record the contract's completion milestones, approval and receipt of funds.

Review the clause before signing

Check the percentage, calculation, release conditions and treatment of disputed work. § 757 expressly addresses prohibited retainage above the statutory cap.

Kushnick Pallaci PLLC assists with retainage and payment provisions in construction contracts and payment disputes. Keep the contract, approvals and payment ledger available for review.

General information only; project coverage and contract date matter.

Home Improvement Contracts: Subcontractor and Insurance Disclosures

Reviewed September 7, 2026.

The original post discussed a proposal requiring subcontractor identification and a new cancellation right. Those proposed terms should not be treated as the current text of General Business Law § 771.

For covered home improvement contracts, the current statute requires a signed writing with contractor identification, scope, price, timing and specified notices and payment terms. It also requires a disclosure, before the contractor or subcontractor begins work, of the existence of property or casualty insurance covering the scope of that work, including the insurer's contact information.

Coordinate statutory and negotiated requirements

The contract or local rules may separately require subcontractor identification, approval, licensing or insurance documentation. Specify the procedure for substitutions and who remains responsible for performance.

Section 771 contains a cancellation notice tied to the owner's signing, with a defined emergency exception. Do not substitute the old proposal's suggested right to cancel whenever a subcontractor is identified. Review the complete current statute and applicable local requirements before using a form.

Kushnick Pallaci PLLC assists clients throughout New York with home improvement and construction contract review. Contact 631-752-7100 or vtp@kushnicklaw.com.

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Sato Construction: An Architect’s Letter Did Not Conclusively Justify Termination

Reviewed September 7, 2026.

In Sato Construction Co., Inc. v. 17 & 24 Corp., 92 AD3d 934 (2d Dept 2012), an owner hired a contractor to restore windows in a landmark building. The architects later reported that deterioration prevented restoration of all the windows, and the owner terminated the agreement.

The court affirmed denial of the owner’s motion to dismiss four contract claims. The architect’s letter did not conclusively establish impossibility or sufficient cause under the contract. Claims for previously approved payment applications also survived. This was a pleading-stage decision, not a final determination that the termination was wrongful or that a particular balance was owed.

Read the termination provisions together

An architect’s certification can have a contractual role without deciding every legal or factual issue. Review the grounds for termination, notice and cure requirements, payment provisions, scope changes and evidence of the actual condition. Preserve photographs, inspection reports, payment certifications and correspondence explaining whether restoration, replacement or a revised scope was possible.

Owners should obtain advice before terminating; contractors should promptly document and respond to asserted defaults. The contract’s wording matters, but a professional’s letter is not necessarily conclusive proof of every condition required to terminate.

Kushnick Pallaci PLLC assists clients throughout New York with construction contract review and termination planning. Contact 631-752-7100 or vtp@kushnicklaw.com.

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Construction Collapse Response: Safety, Reporting, Evidence and Insurance

Reviewed September 7, 2026.

A construction collapse requires immediate protection of people and coordinated professional response. Call 911 for an emergency, evacuate or secure the area as directed, and follow responders’ instructions. Evidence collection must never delay rescue, stabilization or necessary safety measures.

Report and stabilize

For New York City incidents, follow DOB’s worksite incident reporting instructions. Injury incidents require immediate reporting and specified additional information within three business days. Equipment damage also has reporting requirements. Evaluate separate OSHA and other applicable reporting obligations promptly. Engage qualified engineers and authorized contractors; do not reenter or resume work contrary to an order.

Preserve the evidence that can safely be preserved

Record conditions from a safe location, identify witnesses, and preserve plans, site logs, monitoring readings, photographs, messages, inspection records and equipment information. Suspend routine deletion of relevant electronic records when litigation is reasonably anticipated. Coordinate any destructive examination or disposal with counsel, engineers, insurers and other parties as appropriate, while allowing urgent safety work to proceed.

Protect insurance and contract rights

Notify all potentially applicable insurers using the policy’s required procedure, including relevant liability, property, builder’s risk and additional-insured coverage. Keep proof of notice. Review contracts for incident reporting, delay notices, time-extension requests, indemnity and cooperation requirements. A certificate of insurance alone does not establish the scope of coverage.

Counsel can coordinate investigation and claims without substituting for emergency responders or engineers. Keep a clear record of why emergency measures were necessary and what they cost. This article addresses property damage, contractor defense and construction risk management; the firm does not handle plaintiff personal injury claims.

Kushnick Pallaci PLLC assists clients throughout New York with construction-collapse and property damage disputes. Contact 631-752-7100 or vtp@kushnicklaw.com.

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Prime-Contract Documentation Requirements: The Beys Decision

Reviewed September 7, 2026.

In Beys General Construction Corp. v. Hill International, Inc., 92 AD3d 407 (2012), the First Department affirmed a subcontractor's payment judgment.

The subcontractor supplied completion and inspection records and an affidavit supporting the unpaid balance. The contractor's audit adjustments were not adequately connected to the particular requisitions or shown to remain outstanding. The court also rejected reliance on prime-contract documentation requirements that did not concern the scope, quality, character or manner of the subcontract work.

Make intended requirements explicit

A general incorporation reference is not a dependable substitute for stating payment-documentation obligations in the subcontract. Identify required forms, certifications, supporting records and submission dates, and provide the referenced documents before signing.

The decision does not excuse compliance with requirements actually imposed by an enforceable subcontract. Payment claimants should still document completion and the balance due; parties asserting credits or back charges should connect each deduction to specific work and records.

Kushnick Pallaci PLLC assists clients throughout New York with construction subcontract review. Contact 631-752-7100 or vtp@kushnicklaw.com.

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No-Damages-for-Delay Clauses: The LoDuca Decision

Reviewed September 7, 2026.

In LoDuca Associates, Inc. v. PMS Construction Management Corp., 91 AD3d 485 (2012), the First Department enforced the contract's no-damages-for-delay provisions.

The asserted design problems were among the contemplated delay causes. Allegations of poor planning or administration did not establish the required misconduct. A lengthy delay remained relevant to the analysis but did not, by itself, turn an expressly contemplated cause into an uncontemplated one.

Evaluate the actual exception and proof

New York recognizes exceptions, including qualifying bad faith or serious misconduct, uncontemplated delays, delay amounting to intentional abandonment and breach of a fundamental contractual obligation. Invoking an exception requires more than showing that the project ran late or became expensive.

Before signing, compare the clause with time-extension rights, change compensation and other damage waivers. During the project, preserve notices, schedules, directives and cost records. Distinguish a claim for an actual change in scope from a delay claim; changing its label alone does not avoid a contractual limitation.

Kushnick Pallaci PLLC assists clients throughout New York with construction delay disputes. Contact 631-752-7100 or vtp@kushnicklaw.com.

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