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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New York Construction Contracts: Choice of Law and Forum

Reviewed September 7, 2026.

The governing-law clause determines which law the parties select; the forum clause identifies where they must litigate or otherwise resolve a dispute. Those provisions deserve review before a New York construction contract is signed.

For contracts covered by the Prompt Payment Act, General Business Law § 757(1) invalidates provisions selecting another state's law or requiring litigation, arbitration or another dispute-resolution proceeding in another state. The statutory restriction expressly excepts contracts with material suppliers.

Check coverage and the dispute provision together

Section 756 defines covered construction projects and exclusions; the current aggregate project threshold is $150,000. Public projects and specified residential work are excluded. Do not assume the restriction applies to every agreement involving a New York building.

Arbitration provisions also require review under applicable federal arbitration law. The statute's wording alone is not a substitute for evaluating enforceability in the particular transaction. Identify the parties, project, selected forum, arbitral rules and incorporated documents, and address an objection promptly rather than ignoring a demand filed elsewhere.

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

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