When general contractors or subcontractors sign on to construction projects, they usually start off believing everything will run smoothly. But, during the course of the work, issues sometimes arise that force all parties to go running back to their contracts in order to evaluate their options.

One of those options for construction companies is to simply stop work, but contractors need to take care when making such a big decision.

“Stopping work and ultimately terminating the contract is one of the most radical things you can do,” said Joseph McManus Jr., attorney and shareholder at law firm Carlton Fields.

Luckily, most of the circumstances under which contractors are clearly entitled to stop work are included in the most popular standard forms of contracts.


The most common reason that contractors find it necessary to stop work, McManus said, is that they haven’t been paid for approved invoices.

In that scenario, he said, contractors have the right to pull off the job as long as their contracts allow for it, providing they’ve complied with all of the notice requirements.

For example, in the American Institute of Architects’ A201- 2017, “General Conditions of the Contract for Construction,” which is incorporated by reference in most AIA owner-contractor agreements, a contractor has the right to stop work under two conditions.

One circumstance is if the architect does not certify the contractor’s payment application within seven days of receipt, barring some fault of the contractor. The other is if the owner does not pay the approved pay application within seven days of the date established in the contract.

If one of these events occurs, then the contractor can stop work after providing the owner an additional seven days’ notice.

The AIA’s A401-2017, “Standard Form of Agreement Between Contractor and Subcontractor” has a similar provision. The subcontractor can stop work after providing a seven-day notice if it has not received payment from the general contractor within seven days of the payment date set out in the subcontract.

In all of these cases, McManus said, the contractor or subcontractor that hasn’t been paid is entitled to a schedule extension for the period of time work was stopped plus reimbursement for demobilization and remobilization costs.

It’s important, however, for contractors and subcontractors to read their contracts before they sign to make sure there are some protections for nonpayment. Not everyone uses AIA or ConsensusDocs forms, and contracts drawn up in-house by an owner or general contractor might not include favorable terms or recourse for late payments.

“Due diligence,” said attorney Karl Frederic with Windels Marx Lane and Mittendorf LLP, ”is the No. 1 line of defense.”

Short of walking off the job, which is certainly a disruptive action, there is also the mechanic’s lien option, Frederic said, or even just the threat of one in order to induce the owner or general contractor to pay. A mechanic’s lien creates an encumbrance on the project property, and the dollar amount that the lien represents typically must be paid or otherwise resolved before the owner can sell or refinance the property.