Every state establishes its own regulations over certain contracts. This can include real estate contracts when selling a house or healthcare-based contracts. Most state laws allow for more open-ended business contracts — but the construction industry tends to have specific hoops to jump through.
In Florida, it is important for anyone involved in the construction process to understand the kind of requirements that go into any construction contract.
Pay when paid clauses
A pay when paid clause happens between contractors and subcontractors. It describes that a contractor aims to pay the subcontractor after the customer pays.
While Florida law does not require these clauses in construction contracts, Lorman Education Services notes that the state has laws for how contracts word pay when paid clauses. Statutes require these clauses to have plain and unambiguous language and only appear in private project contracts when discussing conditional payment bonds.
A construction contract’s purpose is to arrange a project. Most contracts include project plans from the beginning. If the plans do not exist at the time of the contract’s execution, Florida courts may enforce scope of work details that reference those nonexistent plans if litigation requires it.
Right to stop work passages
According to Levelset, 49% of construction payments were late in 2019. To support contractors, there is a right to stop all work on a project if the owner does not pay the contractor within seven days of invoicing and after the contractor issued seven additional days after written notice.
In the case of any owner, contractor or subcontractor entering into a construction project, it is best to have a drafted contract that adheres to Florida statutes and protects their interests.