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As Reported by the Senate Insurance, Commerce and Labor Committee
122nd General Assembly
Regular Session
1997-1998 | Sub. S. B. No. 71 |
SENATOR CUPP
A BILL
To amend sections 153.56 and 2305.31 and to enact section
4113.62 of the Revised Code to void various types of provisions of a
construction contract or subcontract that are considered to be against public
policy
and to establish new requirements
and limitations relative to exercising rights under a bond for
certain public improvements.
BE IT ENACTED BY THE GENERAL ASSEMBLY OF THE STATE OF OHIO:
Section 1. That sections 153.56 and 2305.31 be amended and
section 4113.62 of the Revised Code be enacted to read as
follows:
Sec. 153.56. (A) Any person to whom any money is due for labor or
work performed
or materials furnished in a public improvement as provided in section 153.54
of the Revised Code, at any time after performing the labor or work or
furnishing the materials, but not later than ninety days after the acceptance
of the public improvement by the duly authorized board or officer, shall
furnish the sureties on the bond, a statement of the amount due to the person.
(B) A suit shall not be brought against sureties on the bond until
after sixty
days after the furnishing of the statement described in DIVISION
(A) OF this section. If the
indebtedness is not paid in full at the expiration of that sixty days, AND
IF THE PERSON COMPLIES WITH DIVISION (C) OF THIS SECTION,
the
person may bring an action in his THE PERSON'S own name upon the
bond, as provided in
sections 2307.06 and 2307.07 of the Revised Code, that action to be commenced,
notwithstanding section 2305.12 of the Revised Code, not later than one year
from the date of acceptance of the public improvement.
(C) TO EXERCISE RIGHTS
UNDER THIS SECTION, A SUBCONTRACTOR OR MATERIALS SUPPLIER WHO IS NOT IN
DIRECT PRIVITY OF CONTRACT WITH THE PRINCIPAL CONTRACTOR FOR THE
PUBLIC IMPROVEMENT SHALL SERVE A NOTICE OF FURNISHING UPON THE
PRINCIPAL CONTRACTOR IN THE FORM PROVIDED IN SECTION 1311.261 OF
THE REVISED
CODE.
(D) A SUBCONTRACTOR OR
MATERIALS SUPPLIER WHO SERVES A NOTICE OF FURNISHING UNDER DIVISION
(C) OF THIS SECTION AS REQUIRED
TO EXERCISE RIGHTS UNDER THIS SECTION HAS THE RIGHT OF RECOVERY
ONLY AS TO AMOUNTS OWED FOR LABOR AND WORK PERFORMED AND MATERIALS
FURNISHED DURING AND AFTER THE TWENTY-ONE DAYS IMMEDIATELY
PRECEDING SERVICE OF THE NOTICE OF FURNISHING.
(E) FOR PURPOSES OF THIS
SECTION, "PRINCIPAL CONTRACTOR" HAS THE SAME MEANING AS IN
SECTION 1311.25 OF THE REVISED
CODE.
Sec. 2305.31. A covenant, promise, agreement, or understanding in, or in
connection with or collateral to, a contract or agreement relative to the
design, planning, construction, alteration, repair, or maintenance of a
building, structure, highway, road, appurtenance, and appliance, including
moving, demolition, and excavating connected therewith, pursuant to which
contract or agreement the promisee, or its independent contractors,
agents, or employees has hired the promisor to perform work, purporting
to indemnify the
promisee, its independent contractors, agents, employees, or indemnitees
against liability for damages
arising out of bodily injury to persons or
damage to property initiated or proximately caused by or resulting from the
negligence of the promisee, its independent contractors, agents, employees, or
indemnitees is against public policy and is void. Nothing
NOTHING in this section
shall prohibit any person from purchasing insurance from an insurance company
authorized to do business in the state of Ohio for his THE
PERSON'S own protection or from
purchasing a construction bond.
Sec. 4113.62. (A) ANY
PROVISION OF A CONSTRUCTION CONTRACT, AGREEMENT, OR
UNDERSTANDING THAT WAIVES RIGHTS UNDER A SURETY BOND IS VOID AND
UNENFORCEABLE AS AGAINST PUBLIC POLICY.
(B) ANY PROVISION OF A
CONSTRUCTION CONTRACT, AGREEMENT, OR UNDERSTANDING, OR
SPECIFICATION OR OTHER DOCUMENTATION THAT IS MADE A PART OF A
CONSTRUCTION CONTRACT, AGREEMENT, OR UNDERSTANDING, THAT WAIVES
ANY PENDING OR ASSERTED CLAIM ON THE BASIS OF FINAL PAYMENT MADE
FROM ONE PERSON TO ANOTHER FOR THE CONSTRUCTION CONTRACT,
AGREEMENT, OR UNDERSTANDING, IS VOID AND UNENFORCEABLE AS
AGAINST PUBLIC POLICY, WHEN THE PERSON AGAINST WHOM THE CLAIM IS
PENDING OR ASSERTED HAS RECEIVED NOTICE OF THAT PENDING OR
ASSERTED CLAIM.
(C)(1) ANY PROVISION OF A
CONSTRUCTION CONTRACT, AGREEMENT, OR UNDERSTANDING, OR
SPECIFICATION OR OTHER DOCUMENTATION THAT IS MADE A PART OF A
CONSTRUCTION CONTRACT, AGREEMENT, OR UNDERSTANDING, THAT WAIVES
OR PRECLUDES LIABILITY FOR DELAY DURING THE COURSE OF A
CONSTRUCTION CONTRACT WHEN THE CAUSE OF THE DELAY IS A PROXIMATE RESULT OF THE
OWNER'S ACT OR FAILURE TO ACT, OR THAT WAIVES ANY OTHER REMEDY
FOR A CONSTRUCTION CONTRACT WHEN THE CAUSE OF THE DELAY IS A PROXIMATE RESULT
OF THE OWNER'S ACT OR FAILURE TO ACT, IS VOID AND UNENFORCEABLE
AS AGAINST PUBLIC POLICY.
(2) ANY PROVISION OF A CONSTRUCTION SUBCONTRACT AGREEMENT, OR
UNDERSTANDING, OR SPECIFICATION OR OTHER DOCUMENTATION THAT IS MADE PART OF A
CONSTRUCTION SUBCONTRACT, AGREEMENT, OR UNDERSTANDING, THAT WAIVES OR
PRECLUDES LIABILITY FOR DELAY DURING THE COURSE OF A CONSTRUCTION SUBCONTRACT
WHEN THE CAUSE OF THE DELAY IS A PROXIMATE RESULT OF THE
OWNER'S OR CONTRACTOR'S ACT OR FAILURE TO ACT, OR THAT WAIVES ANY OTHER REMEDY
FOR A CONSTRUCTION SUBCONTRACT WHEN THE CAUSE OF THE DELAY IS A PROXIMATE
RESULT OF THE OWNER'S OR CONTRACTOR'S ACT OR FAILURE TO ACT, IS VOID AND
UNENFORCEABLE AS AGAINST PUBLIC POLICY.
(D) NOTHING IN THIS
SECTION SHALL BE CONSTRUED TO DO ANY OF THE FOLLOWING:
(1) PROHIBIT A CONSTRUCTION CONTRACT, AGREEMENT, OR
UNDERSTANDING FROM PROVIDING THAT PAYMENT FROM A CONTRACTOR TO A
SUBCONTRACTOR OR MATERIALS SUPPLIER, OR FROM A SUBCONTRACTOR TO A
MATERIALS SUPPLIER, LOWER TIER SUBCONTRACTOR, OR LOWER TIER
MATERIALS SUPPLIER, IS CONTINGENT OR CONDITIONED UPON RECEIPT OF
PAYMENT FROM ANY OTHER PERSON;
(2) PROHIBIT A PERSON FROM FILING A CLAIM TO PROTECT
RIGHTS UNDER SECTIONS 153.56, 1311.06, AND 1311.26 OF THE
REVISED
CODE FROM EXPIRING DURING THE
PENDENCY OF RECEIPT OF PAYMENT THAT IS CONTINGENT OR CONDITIONED
AS DESCRIBED IN DIVISION (D)(1)
OF THIS SECTION;
(3) CREATE A LIABILITY FOR A SURETY ON A BOND THAT IS
GREATER THAN THAT OF ITS PRINCIPAL, OR LIMIT THE AVAILABILITY TO
A SURETY OF ANY DEFENSES AVAILABLE TO ITS PRINCIPAL.
(E) AS USED IN THIS
SECTION:
(1) "CONTRACTOR" AND "LOWER
TIER SUBCONTRACTOR" HAVE THE SAME
MEANINGS AS IN SECTION 4113.61 OF THE
REVISED
CODE.
(2) "MATERIALS SUPPLIER" INCLUDES ANY PERSON BY WHOM ANY MATERIALS ARE
FURNISHED IN FURTHERANCE OF AN IMPROVEMENT.
(3) "LOWER TIER MATERIALS SUPPLIER" MEANS A MATERIALS SUPPLIER WHO IS NOT
IN PRIVITY OF CONTRACT WITH A CONTRACTOR BUT IS IN PRIVITY OF CONTRACT WITH
ANOTHER SUBCONTRACTOR OR A MATERIALS SUPPLIER.
(4) "SUBCONTRACTOR," "IMPROVEMENT," AND "MATERIALS" HAVE THE SAME MEANINGS
AS IN SECTION 1311.01 of the Revised Code.
Section 2. That existing sections 153.56 and 2305.31 of the Revised Code are
hereby repealed.
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