Many construction contracts expressly preclude the performing party from stopping work even if there is a dispute, including claims of nonpayment or change order disagreements. Even if the contract is silent on the right to stop work, that does not mean the right to stop work is assured. Therefore, having the right to stop work can mitigate losses during a dispute as it can prevent or minimize having to continue to incur costs while a dispute is being resolved or while you are not being paid.

An example of the “Right to Stop Work” clause is:

“Subcontractor may slow or stop work without liability or penalty if its pay request has not been paid within 45 days from submission to Contractor.”

However, giving a party the right to stop work may cause delays to the project schedule. This is particularly problematic if your contract does not have the right to stop work. Most contractors should try to ensure that they are not providing greater rights to their subtrades than the obligations they have upstream to their contracting counterparty.

We hope this helps you understand the construction contracting process a little better. If you have questions about your contract, send us an email or give us a call. And make sure to check out our other free tools and our weekly podcast.