GENERAL ASSEMBLY OF NORTH CAROLINA

SESSION 1997

S	1 

SENATE BILL 1028

Short Title:  Subcontractor Claims Against Owners.	(Public)

─────────────────────────────────────── 
Sponsors: Senator Miller.

─────────────────────────────────────── 
Referred to:  Judiciary.

─────────────────────────────────────── 

April 21, 1997

A BILL TO BE ENTITLED
AN ACT TO ALLOW A CONTRACTOR, ON BEHALF OF A SUBCONTRACTOR, TO FILE AN ACTION AGAINST THE OWNER REGARDING A CLAIM ARISING OUT OF THE CONTRACT BETWEEN THE SUBCONTRACTOR AND THE CONTRACTOR FOR THE SAME PROJECT THAT IS THE SUBJECT OF THE CONTRACT BETWEEN THE CONTRACTOR AND THE OWNER.
The General Assembly of North Carolina enacts:
Section 1.  G.S. 22C-2 reads as rewritten:
"§ 22C-2.  Performance by subcontractor; actions by contractor on behalf of subcontractor.
(a)	Performance by a subcontractor in accordance with the provisions of its contract shall entitle it to payment from the party with whom it contracts.  Payment by the owner to a contractor is not a condition precedent for payment to a subcontractor and payment by a contractor to a subcontractor is not a condition precedent for payment to any other subcontractor, and an agreement to the contrary is unenforceable.
(b)	A contractor may, on behalf of a subcontractor of any tier under the contractor, file an action against an owner regarding a claim arising out of or relating to labor, materials, or services furnished by the subcontractor to the contractor pursuant to a contract between the subcontractor and the contractor for the same project that is the subject of the contract between the contractor and the owner.
(c)	In any action filed by a contractor against an owner under subsection (b) of this section, it shall not be a defense that the costs and damages at issue were incurred by a subcontractor and that subcontractor has not been paid for these costs and damages.  The owner shall not be required to pay the contractor for the costs and damages incurred by a subcontractor, unless the subcontractor submits proof to the court that the contractor has paid these costs and damages to the subcontractor."
Section 2.  This act becomes effective October 1, 1997, and applies to contracts entered on or after that date.