Montana Code 28-2-2117. Suspension of performance — termination
28-2-2117. Suspension of performance — termination. (1) (a) A contractor may suspend performance under a construction contract for failure by the owner to make timely payment of the amount approved pursuant to 28-2-2103, and the contractor may terminate the construction contract if the payment obligations are not satisfied within 30 days of suspension.
Terms Used In Montana Code 28-2-2117
- Construction contract: means a written agreement between an owner and a contractor for the contractor to construct or improve or to provide construction management for the construction or improvement of an improvement to real property. See Montana Code 28-2-2101
- Contract: A legal written agreement that becomes binding when signed.
- Contractor: means a person who has signed a construction contract with an owner. See Montana Code 28-2-2101
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Owner: means a governmental entity or private entity that has a legal interest in the real property improved or to be improved by the performance of the construction contract. See Montana Code 28-2-2101
- Person: includes a corporation or other entity as well as a natural person. See Montana Code 1-1-201
- Subcontractor: means a person who has contracted with a contractor or another subcontractor for the purposes of performance of all or a part of a subcontract. See Montana Code 28-2-2101
(b)A contractor shall provide written notice to the owner at least 7 calendar days before the contractor’s intended suspension of performance or contract termination unless a shorter notice period is prescribed in the construction contract.
(c)A contractor may not be considered in breach of a construction contract for suspending performance or terminating a construction contract pursuant to this subsection (1).
(d)A construction contract may not extend the time period for a contractor to suspend performance or terminate a construction contract under this subsection (1).
(2)(a) A subcontractor may suspend performance under a construction contract if the owner fails to make timely payment of amounts approved pursuant to 28-2-2103 for the subcontractor’s work and the contractor fails to pay the subcontractor for the approved work. The subcontractor may terminate the construction contract if the payment obligations are not satisfied within 30 days of suspension.
(b)A subcontractor shall provide written notice to the contractor and the owner at least 7 calendar days before the subcontractor’s intended suspension of performance or contract termination unless a shorter notice period is prescribed in the construction contract.
(c)A subcontractor may not be considered in breach of a construction contract for suspending performance or terminating a construction contract pursuant to this subsection (2).
(d)A construction contract may not extend the time period for a subcontractor to suspend performance or terminate a construction contract under this subsection (2).
(3)(a) A subcontractor may suspend performance under a construction contract if the owner makes timely payment of amounts approved pursuant to 28-2-2103 for the subcontractor’s work but the contractor fails to pay the subcontractor for the approved work. The subcontractor may terminate the construction contract if the payment obligations are not satisfied within 30 days of suspension.
(b)A subcontractor may not be considered in breach of a construction contract for suspending performance or terminating a construction contract pursuant to this subsection (3).
(c)A construction contract may not extend the time period for a subcontractor to suspend performance or terminate a construction contract under this subsection (3).
(4)(a) A subcontractor may suspend performance under a construction contract if the owner declines to approve portions of the contractor’s payment request pursuant to 28-2-2103 for the subcontractor’s work and the reasons for the owner’s refusal to approve are not the fault of or directly related to the subcontractor’s work. The subcontractor may terminate the construction contract if the payment obligations are not satisfied within 30 days of suspension.
(b)A subcontractor may not be considered in breach of a construction contract for suspending performance or terminating a construction contract pursuant to this subsection (4).
(c)A construction contract may not extend the time period for a subcontractor to suspend performance or terminate a construction contract under this subsection (4).
(5)A subcontractor shall provide written notice to the contractor and the owner at least 7 calendar days before the subcontractor’s intended suspension of performance or contract termination unless a shorter notice period is prescribed in the construction contract between the contractor and subcontractor.
(6)A contractor or subcontractor that suspends performance as provided in this section is not required to furnish further labor, materials, or services until the contractor or subcontractor is paid the amount that was approved, together with any costs incurred for mobilization and project rescheduling resulting from the shutdown or restartup of a project.
(7)Written notice required under this section must be considered to have been provided if either of the following occurs:
(a)the written notice is delivered in person to the individual or a member of the entity or to an officer of the corporation for which it was intended; or
(b)the written notice is delivered at or sent by any means that provides written, third-party verification of delivery to the last-known business address of the party receiving notice.