2010 Nevada Code
TITLE 54 PROFESSIONS, OCCUPATIONS AND BUSINESSES
Chapter 624 Contractors
NRS 624.626 Grounds and procedure for stopping work or terminating agreement; change orders; damages and other remedies; rights of lower-tiered subcontractors after work stoppage or termination of agreement; limitations on liability.

NRS 624.626 Grounds and procedure for stopping work or terminating agreement; change orders; damages and other remedies; rights of lower-tiered subcontractors after work stoppage or termination of agreement; limitations on liability.

1. If:

(a) A higher-tiered contractor fails to pay the lower-tiered subcontractor within the time provided in subsection 1 or 4 of NRS 624.624;

(b) A higher-tiered contractor fails to pay the lower-tiered subcontractor within 45 days after the 25th day of the month in which the lower-tiered subcontractor submits a request for payment, even if the higher-tiered contractor has not been paid and the agreement contains a provision which requires the higher-tiered contractor to pay the lower-tiered subcontractor only if or when the higher-tiered contractor is paid;

(c) A higher-tiered contractor fails to give the lower-tiered subcontractor written notice of any withholding in the time and manner required by subsection 3 or 4 of NRS 624.624;

(d) After receipt of a notice of withholding pursuant to subsection 3 or 4 of NRS 624.624, the lower-tiered subcontractor gives the higher-tiered contractor written notice pursuant to subsection 4 of NRS 624.624 and thereby disputes in good faith and for reasonable cause the amount withheld or the condition or reason for the withholding; or

(e) Within 30 days after the date that a written request for a change order is submitted by the lower-tiered subcontractor to the higher-tiered contractor, the higher-tiered contractor fails to:

(1) Issue the change order; or

(2) If the request for a change order is unreasonable, give written notice to the lower-tiered subcontractor of the reasons why the change order is unreasonable,

the lower-tiered subcontractor may stop work under the agreement until payment is received if the lower-tiered subcontractor gives written notice to the higher-tiered contractor at least 10 days before stopping work.

2. If a lower-tiered subcontractor stops work pursuant to paragraph (a), (c) or (d) of subsection 1, the lower-tiered subcontractor may terminate the agreement with the higher-tiered contractor by giving written notice of the termination to the higher-tiered contractor after stopping work but at least 15 days before the termination of the agreement. If the lower-tiered subcontractor is paid the amount due before the date for termination set forth in the written notice, the lower-tiered subcontractor shall not terminate the agreement and shall resume work.

3. If a higher-tiered contractor fails to issue a change order or fails to give written notice pursuant to paragraph (e) of subsection 1:

(a) The agreement price must be increased by the amount sought in the request for a change order;

(b) The time for performance must be extended by the amount sought in the request for a change order;

(c) The lower-tiered subcontractor may submit to the higher-tiered contractor a bill or invoice for the labor, materials, equipment or services that are the subject of the request for a change order; and

(d) The higher-tiered contractor shall pay the lower-tiered subcontractor for such labor, materials, equipment or services with the next payment made to the lower-tiered subcontractor.

4. If an owner or higher-tiered contractor through his or her own act or neglect, or through an act or neglect of his or her agent, excluding acts of God, floods, fires, labor disputes, strikes or reasonable adjustments in work schedules, causes the work to be stopped for a period of 15 days or more, the lower-tiered subcontractor may terminate the agreement if:

(a) The lower-tiered subcontractor gives written notice of his or her intent to terminate to the higher-tiered contractor at least 10 days before terminating the agreement; and

(b) The higher-tiered contractor fails to allow the lower-tiered subcontractor to resume the work within the time set forth in the written notice given pursuant to paragraph (a).

5. If a lower-tiered subcontractor stops work pursuant to paragraph (a), (c) or (d) of subsection 1, the higher-tiered contractor may terminate the agreement by giving the lower-tiered subcontractor written notice of his or her intent to terminate at least 15 days before terminating the agreement.

6. If the agreement is terminated pursuant to subsection 4, or if the lower-tiered subcontractor stops work in accordance with this section and the agreement is terminated pursuant to subsection 2 or 5, the lower-tiered subcontractor is entitled to recover from the higher-tiered contractor with whom the lower-tiered subcontractor has entered into an agreement the amount found by a trier of fact to be due the lower-tiered subcontractor, including, without limitation:

(a) The cost of all work, labor, materials, equipment and services furnished by and through the lower-tiered subcontractor, including any overhead the lower-tiered subcontractor and his or her lower-tiered subcontractors and suppliers incurred and profit the lower-tiered subcontractor and his or her lower-tiered subcontractors and suppliers earned through the date of termination;

(b) The balance of the profit that the lower-tiered subcontractor and his or her lower-tiered subcontractors and suppliers would have received if the agreement had been performed in full;

(c) Interest determined pursuant to NRS 624.630; and

(d) The reasonable costs, including court costs and arbitration costs, incurred by the lower-tiered subcontractor and his or her lower-tiered subcontractors in collecting the amount due.

In any action brought to enforce the rights or obligations set forth in this subsection, the trier of fact may award reasonable attorney's fees to the lower-tiered subcontractor and his or her lower-tiered subcontractors and suppliers or, if the trier of fact determines that the lower-tiered subcontractor stopped work or terminated the agreement without a reasonable basis in law or fact, the trier of fact may award reasonable attorney's fees and costs, including court costs and arbitration costs, to the higher-tiered contractor.

7. If a lower-tiered subcontractor stops work pursuant to this section, each lower-tiered subcontractor with whom the lower-tiered subcontractor has entered into an agreement and who has not fully performed under the agreement may also stop work on the work of improvement. If a lower-tiered subcontractor terminates an agreement pursuant to this section, all of his or her lower-tiered subcontractors may terminate their agreements with the lower-tiered subcontractor.

8. The right of a lower-tiered subcontractor to stop work or terminate an agreement pursuant to this section is in addition to all other rights that the lower-tiered subcontractor may have at law or in equity and does not impair or affect the right of a lower-tiered subcontractor to maintain a civil action or to submit any controversy arising under the agreement to arbitration.

9. No lower-tiered subcontractor or his or her lower-tiered subcontractors or suppliers, or their respective sureties, may be held liable for any delays or damages that an owner or higher-tiered contractor may suffer as a result of the lower-tiered subcontractor and his or her lower-tiered subcontractors and suppliers stopping their work or the provision of materials or equipment or terminating an agreement for a reasonable basis in law or fact and in accordance with this section.

(Added to NRS by 2001, 1617; A 2005, 1731)