As Passed by the House 1
122nd General Assembly 4
Regular Session Am. Sub. S. B. No. 71 5
1997-1998 6
SENATOR CUPP-REPRESENTATIVES CORBIN-MEAD-HODGES- 8
WILLAMOWSKI-ROMAN 9
11
A B I L L
To amend section 153.56 and to enact section 4113.62 14
of the Revised Code to void various types of
provisions of a construction contract or 15
subcontract that are considered to be against
public policy and to establish new requirements 17
and limitations relative to exercising rights 18
under a bond for certain public improvements. 19
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO: 21
Section 1. That section 153.56 be amended and section 24
4113.62 of the Revised Code be enacted to read as follows: 25
Sec. 153.56. (A) Any person to whom any money is due for 34
labor or work performed or materials furnished in a public 36
improvement as provided in section 153.54 of the Revised Code, at 37
any time after performing the labor or work or furnishing the 38
materials, but not later than ninety days after the acceptance of 39
the public improvement by the duly authorized board or officer,
shall furnish the sureties on the bond, a statement of the amount 40
due to the person.
(B) A suit shall not be brought against sureties on the 42
bond until after sixty days after the furnishing of the statement 44
described in DIVISION (A) OF this section. If the indebtedness 46
is not paid in full at the expiration of that sixty days, AND IF 47
THE PERSON COMPLIES WITH DIVISION (C) OF THIS SECTION, the person 49
may bring an action in his THE PERSON'S own name upon the bond, 50
as provided in sections 2307.06 and 2307.07 of the Revised Code, 51
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that action to be commenced, notwithstanding section 2305.12 of 52
the Revised Code, not later than one year from the date of 53
acceptance of the public improvement.
(C) TO EXERCISE RIGHTS UNDER THIS SECTION, A SUBCONTRACTOR 56
OR MATERIALS SUPPLIER SUPPLYING LABOR OR MATERIALS THAT COST MORE 57
THAN THIRTY THOUSAND DOLLARS, WHO IS NOT IN DIRECT PRIVITY OF 58
CONTRACT WITH THE PRINCIPAL CONTRACTOR FOR THE PUBLIC 59
IMPROVEMENT, SHALL SERVE A NOTICE OF FURNISHING UPON THE
PRINCIPAL CONTRACTOR IN THE FORM PROVIDED IN SECTION 1311.261 OF 60
THE REVISED CODE. 62
(D) A SUBCONTRACTOR OR MATERIALS SUPPLIER WHO SERVES A 65
NOTICE OF FURNISHING UNDER DIVISION (C) OF THIS SECTION AS 66
REQUIRED TO EXERCISE RIGHTS UNDER THIS SECTION HAS THE RIGHT OF 67
RECOVERY ONLY AS TO AMOUNTS OWED FOR LABOR AND WORK PERFORMED AND 68
MATERIALS FURNISHED DURING AND AFTER THE TWENTY-ONE DAYS 69
IMMEDIATELY PRECEDING SERVICE OF THE NOTICE OF FURNISHING. 70
(E) FOR PURPOSES OF THIS SECTION, "PRINCIPAL CONTRACTOR" 73
HAS THE SAME MEANING AS IN SECTION 1311.25 OF THE REVISED CODE. 75
Sec. 4113.62. (A) ANY PROVISION OF A CONSTRUCTION 78
CONTRACT, AGREEMENT, OR UNDERSTANDING THAT WAIVES RIGHTS UNDER A 79
SURETY BOND IS VOID AND UNENFORCEABLE AS AGAINST PUBLIC POLICY. 80
(B) ANY PROVISION OF A CONSTRUCTION CONTRACT, AGREEMENT, 83
OR UNDERSTANDING, OR SPECIFICATION OR OTHER DOCUMENTATION THAT IS 84
MADE A PART OF A CONSTRUCTION CONTRACT, AGREEMENT, OR 85
UNDERSTANDING, THAT WAIVES ANY PENDING OR ASSERTED CLAIM ON THE 86
BASIS OF FINAL PAYMENT MADE FROM ONE PERSON TO ANOTHER FOR THE 87
CONSTRUCTION CONTRACT, AGREEMENT, OR UNDERSTANDING, IS VOID AND 88
UNENFORCEABLE AS AGAINST PUBLIC POLICY, WHEN THE PERSON AGAINST 89
WHOM THE CLAIM IS PENDING OR ASSERTED HAS RECEIVED NOTICE OF THAT 90
PENDING OR ASSERTED CLAIM. NOTHING IN THIS DIVISION PRECLUDES 91
PARTIES TO A CONSTRUCTION CONTRACT, AGREEMENT, OR UNDERSTANDING 92
FROM ENTERING INTO A SUBSEQUENT SETTLEMENT AGREEMENT ARISING FROM 93
A CLAIM UNDER THAT CONSTRUCTION CONTRACT, AGREEMENT, OR 94
UNDERSTANDING.
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(C)(1) ANY PROVISION OF A CONSTRUCTION CONTRACT, 97
AGREEMENT, OR UNDERSTANDING, OR SPECIFICATION OR OTHER 98
DOCUMENTATION THAT IS MADE A PART OF A CONSTRUCTION CONTRACT, 99
AGREEMENT, OR UNDERSTANDING, THAT WAIVES OR PRECLUDES LIABILITY 100
FOR DELAY DURING THE COURSE OF A CONSTRUCTION CONTRACT WHEN THE 101
CAUSE OF THE DELAY IS A PROXIMATE RESULT OF THE OWNER'S ACT OR 102
FAILURE TO ACT, OR THAT WAIVES ANY OTHER REMEDY FOR A 103
CONSTRUCTION CONTRACT WHEN THE CAUSE OF THE DELAY IS A PROXIMATE
RESULT OF THE OWNER'S ACT OR FAILURE TO ACT, IS VOID AND 104
UNENFORCEABLE AS AGAINST PUBLIC POLICY. 105
(2) ANY PROVISION OF A CONSTRUCTION SUBCONTRACT, 107
AGREEMENT, OR UNDERSTANDING, OR SPECIFICATION OR OTHER 108
DOCUMENTATION THAT IS MADE PART OF A CONSTRUCTION SUBCONTRACT, 109
AGREEMENT, OR UNDERSTANDING, THAT WAIVES OR PRECLUDES LIABILITY 110
FOR DELAY DURING THE COURSE OF A CONSTRUCTION SUBCONTRACT WHEN 111
THE CAUSE OF THE DELAY IS A PROXIMATE RESULT OF THE OWNER'S OR 112
CONTRACTOR'S ACT OR FAILURE TO ACT, OR THAT WAIVES ANY OTHER
REMEDY FOR A CONSTRUCTION SUBCONTRACT WHEN THE CAUSE OF THE DELAY 113
IS A PROXIMATE RESULT OF THE OWNER'S OR CONTRACTOR'S ACT OR 114
FAILURE TO ACT, IS VOID AND UNENFORCEABLE AS AGAINST PUBLIC 115
POLICY.
(D) NO CONSTRUCTION CONTRACT, AGREEMENT, OR UNDERSTANDING 118
THAT MAKES PAYMENT FROM A CONTRACTOR TO A SUBCONTRACTOR OR 119
MATERIALS SUPPLIER, OR FROM A SUBCONTRACTOR TO A MATERIALS 120
SUPPLIER, LOWER TIER SUBCONTRACTOR, OR LOWER TIER MATERIALS 121
SUPPLIER CONTINGENT OR CONDITIONED UPON RECEIPT OF PAYMENT FROM 122
ANY OTHER PERSON SHALL PROHIBIT A PERSON FROM FILING A CLAIM TO
PROTECT RIGHTS UNDER SECTIONS 153.56, 1311.06, AND 1311.26 OF THE 124
REVISED CODE FROM EXPIRING DURING THE PENDENCY OF RECEIPT OF 127
PAYMENT.
(E) NOTHING IN THIS SECTION SHALL BE CONSTRUED TO CREATE A 129
LIABILITY FOR A SURETY ON A BOND THAT IS GREATER THAN THAT OF ITS 131
PRINCIPAL, OR LIMIT THE AVAILABILITY TO A SURETY OF ANY DEFENSES 132
AVAILABLE TO ITS PRINCIPAL.
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(F) AS USED IN THIS SECTION: 135
(1) "CONTRACTOR" AND "LOWER TIER SUBCONTRACTOR" HAVE THE 138
SAME MEANINGS AS IN SECTION 4113.61 OF THE REVISED CODE. 141
(2) "MATERIALS SUPPLIER" INCLUDES ANY PERSON BY WHOM ANY 143
MATERIALS ARE FURNISHED IN FURTHERANCE OF AN IMPROVEMENT. 144
(3) "LOWER TIER MATERIALS SUPPLIER" MEANS A MATERIALS 146
SUPPLIER WHO IS NOT IN PRIVITY OF CONTRACT WITH A CONTRACTOR BUT 147
IS IN PRIVITY OF CONTRACT WITH ANOTHER SUBCONTRACTOR OR A 148
MATERIALS SUPPLIER.
(4) "SUBCONTRACTOR," "IMPROVEMENT," AND "MATERIALS" HAVE 150
THE SAME MEANINGS AS IN SECTION 1311.01 OF THE REVISED CODE. 151
Section 2. That existing section 153.56 of the Revised 153
Code is hereby repealed. 154
Section 3. Nothing in section 4113.62 of the Revised Code, 156
as enacted by this act, applies to or shall be construed as 157
applying to any contracts, agreements, or understandings entered 158
into before the effective date of this act. 159