SECOND REGULAR SESSION

HOUSE BILL NO. 2332

94TH GENERAL ASSEMBLY

INTRODUCED BY REPRESENTATIVE PARSON.

                  Read 1st time March 3, 2008 and copies ordered printed.

D. ADAM CRUMBLISS, Chief Clerk

5039L.01I

AN ACT

To amend chapter 434, RSMo, by adding thereto one new section relating to unenforceable construction contracts.

Be it enacted by the General Assembly of the state of Missouri, as follows:

            Section A. Chapter 434, RSMo, is amended by adding thereto one new section, to be known as section 434.105, to read as follows:

            434.105. 1. No agreement, provision, covenant, clause, or understanding in, collateral to, implied in, or affecting a construction contract shall:

            (1) State that a party to the construction contract cannot suspend performance under such contract or terminate such contract if another party to such contract fails to make prompt payments under such contract;

            (2) Require a party to the construction contract to continue work or to continue to supply, furnish, or provide materials, labor, or services if that party is not paid under such contract;

            (3) Permit, allow, or authorize one party to take the following adverse action:

            (a) Terminate or suspend the construction contract;

            (b) Withhold, deduct, back charge, setoff, or redirect payments otherwise due to another party to the construction contract;

            (c) Take possession of equipment, materials, appliances, property, or tools of another construction contract;

            (d) Take over and finish the work of another party to the construction contract;

            (e) Take any other action detrimental to another party for any reason without first giving written notice of the adverse action to the party against whom the adverse action will be taken and stating with particularity what actions need to be taken to cure the breach, defect, or deficiency serving as the basis for taking the adverse action and giving reasonable opportunity to cure the same;

            (4) Require one party to a construction contract to waive or release any rights it has under such contract or by operation of law to recover any amount in dispute as a condition for receiving payment of an amount not in dispute;

            (5) Make the construction contract subject to the laws of another state or that requires any litigation, arbitration, or other dispute resolution proceeding arising from such contract to be conducted in another state.

            2. Any agreement, provision, covenant, clause, or understanding in, collateral to, implied in, or affecting a construction contract described in subsection 1 of this section is void against public policy and wholly unenforceable.

            3. As used in this section, a construction contract shall be one for private construction between:

            (1) Any owner and any contractor or supplier;

            (2) Any contractor and any subcontractor or supplier;

            (3) Any subcontractor and any sub-subcontractor or supplier;

            (4) Any sub-subcontractor and sub-sub-subcontractor or supplier at whatever tier for construction, reconstruction, remodeling, alteration, maintenance, or repair of any Missouri real property, buildings, structures, improvements, highways, streets, bridges, viaducts, shafts, wells, water or sewer systems, gas or other distribution systems, pipelines, or appliances, including demolition, moving, or excavation connected therewith, and shall include the furnishing of surveying, design, engineering, development, supervision, testing, observation, development, planning, or management services or labor, materials, or equipment in connection with such work.

            4. The provisions of this section shall only apply to construction contracts or agreements entered into after August 28, 2008.

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